Online Publication - Cold War History Research Center

Online Publication
July
2013
Marko Miljkovi!
WESTERN TECHNOLOGY IN A
SOCIALIST FACTORY: THE
FORMATIVE PHASE OF
THE YUGOSLAV AUTOMOBILE
INDUSTRY, 1955-1962
CEU,
2013!
W EST E R N T E C H N O L O G Y I N A SO C I A L IST F A C T O R Y : T H E
F O R M A T I V E P H ASE O F
T H E Y U G OSL A V A U T O M O B I L E I N D UST R Y, 1955-1962
by
0DUNR0LOMNRYLü
Submitted to
Central European University
History Department
In partial fulfillment of the requirements for the degree of
Master of Arts
Supervisor: Professor Marsha Siefert
Second reader: Professor Jacek Kochanowicz
Budapest, Hungary
2013
Copyright in the text of this thesis rests with the Author. Copies by any process, either in full or
part, may be made only in accordance with the instructions given by the Author and lodged in
the Central European Library. Details may be obtained from the librarian. This page must form
a part of any such copies made. Further copies made in accordance with such instructions may
not be made without the written permission of the Author.
A BST R A C T
In my thesis, I am exploring the problem of the Yugoslav technological inability to
autonomously develop its automobile industry, with emphasis on the period 1955-1962 when
the first national passenger automobile manufacturer was established in the Crvena Zastava
factory in Kragujevac, based on technology of the Italian automobile manufacturer Fiat. The
political implications of this cooperation are important part of my thesis, most notably the
context of the Cold War in which this kind of cooperation was important in maintaining the
communication between the two blocs, and important testing ground for creation of further
policies.
In my thesis I am also investigating the process of adaptation of foreign technology to
the overall Yugoslav economic, political and social setting and its impact on changing of
Yugoslav industrial practices and strategies of development. In my analysis, I am focusing on
the everyday communication between the Crvena Zastava and its network of sub-contractors,
as well as the role high-ranking party officials had in the process of the development of the
Yugoslav automobile industry. Finally, the thesis also deals with the impact of the Western
technology had in the process of creation of the Yugoslav socialist society.
A C K N O W L E D G E M E N TS
It would be difficult to mention all the people who helped me during the process of
creation of this thesis but I would like first and foremost to express my deepest gratitude to my
supervisor Prof. Marsha Siefert, who followed me through the entire process, from the
interview in the time of my application for the Central European University program, right
down to the last day of my thesis writing. Her sharp mind and great dedication to details have
helped me to better comprehend the materials and sources I have collected and to grasp the
very scope and reach of my thesis topic. I am also very thankful to Prof. Jacek Kochanowicz
whose course have helped me to better understand the complexity of the topic of my thesis and
SURYLGHGPHZLWKLPSRUWDQW³WRROV´LQLQYHVWLJDWLQJWRSLFVLQVRFLDOLVWHFRQRP\ In addition, I
would like to thank to the entire Department staff, and in particular to two wonderful women,
Anikó Molnar for her patience, continuous help and suggestions, and Eszter Timar who helped
me immensely to improve my English writing skills, and who was a good friend and a very
kind advisor.
Much more people deserve my gratitude, but I would like also to mention very kind and
patient staff of the Personnel Department of the Zavodi Crvena Zastava in Kragujevac with
whom I have quite literally removed layers of time in our joint search for the archival material.
Finally, I would like to mention my dear friend and colleague from the History Department of
WKH)DFXOW\RI3KLORVRSK\LQ%HOJUDGH3URI5DGLQD9XþHWLüZKRVHVXJJHVWLRQVDQGLGHDVKDYH
given me an important insight into the spirits of the period.
Author,
Budapest, June 2013
I
Table of Contents LIST OF ABBREVATIONS ...................................................................................................... IV Introduction .................................................................................................................................. 5 I Contextualizing the Development of the Automobile Industry in Yugoslavia ........................ 15 1.1 Specific and General: Yugoslav Industrialization in the Context of the Third World
&RXQWULHV¶3RVW-War Development ......................................................................................... 16 1.2 Technology Transfer ......................................................................................................... 17 1.3 The Automobile Industry as a Leading Sector of Industrialization .................................. 23 1.4 Models of Automobile Production .................................................................................... 26 II The Yugoslav Industrial Heritage, 1918-1941 ....................................................................... 29 2.1 Industrialization of Yugoslavia during the Interwar Period ............................................ 29 2.2 Industrial Workers in Yugoslavia ..................................................................................... 35 $:RUNHUV¶2DVLV7KH0LOLWDU\-Technical Institute in Kragujevac ................................. 39 ,,,7KH³*UHDW´&KDQJH$XWRPRELOH,QGXVWU\LQWKH3RVW-War Development, 1945-1962 ....... 44 3.1 Sovietization of the Yugoslav Automobile Industry, 1944-1948 ....................................... 46 %HWZHHQWKH7UXFNDQGWKH$XWRPRELOH&UHDWLQJWKH³*UHDW´&KDQJH-1954 ...... 55 ³&DGUHV'HFLGH(YHU\WKLQJ´&RQVROLGDWLQJWKH&KDQJH1954-1962........................... 69 3URGXFLQJDQ$XWRPRELOHLQ<XJRVODYLD7KH³*UHDW´&KDQJHDQGLWV&RQWUDGLFWLRQV . 80 IV Inside the Automobile Factory: Yugoslav Workers and Western Technology .................... 89 4.1 Workers Decide Everything: The Decision Making in the Crvena Zastava F actory ....... 90 II
4.2 We Were the Workers: Integrating the Old with the New Workers ................................ 100 4.3 Learning by Doing .......................................................................................................... 111 Conclusion ................................................................................................................................ 120 BIBLIOGRAPHY .................................................................................................................... 126 III
L IST O F A B B R E V A T I O NS
ASE A N ± Association of Southeast Asian Nations
C I A ± Central Intelligence Agency
C O M E C O N - Council for Mutual Economic Assistance, established in 1949
E C OSO C ± 8QLWHG1DWLRQ¶V(FRQRPLFDQG6RFLDO&RXQFLO
E L I ± Export Led Industrialization
F D I ± Foreign Direct Investments
F E C ± Federal Executive Council (introduced in 1953, acting as the Yugoslav federal
government
F Y P ± Five Year Plan
G D R ± German Democratic Republic
G I F ± General Investment Fund
I B R D ± International Bank of Reconstruction and Development
I M R ± Industrija Motora Rakovica [The Rakovica Motor Industry]
ISI ± Import Substitution Industrialization
L C Y ± League of Communists of Yugoslavia
T A M ± Tovarna Avtomobilov Maribor [The Maribor Automobile Factory]
U N R R A ± United Nations Relief and Rehabilitation Administration
Y A ± Yugoslav Army
IV
Introduction
³(YHU\ QHZ WUXFN ± ɚ QHZ DQVZHU WR VODQGHUHUV´ ³:H PDVWHUHG WKH SURGXFWLRQ RI
WUXFNVDQGWKLV\HDUZHDUHJRLQJWRPDVWHUWKHSURGXFWLRQRIWUDFWRUV´1 ³7KLVLVRXUGRPHVWLF
SURGXFW´³0DGHLQ<XJRVODYLD´2 These slogans of the Yugoslav motor industry displayed on
a few trucks and carried by the workers during the 1949 May 1st Parade presented symbolically
and quite optimistically how previously underdeveloped and highly agricultural Yugoslavia
ZDV DOPRVW LQ ³UHYROXWLRQDU\ MXPSV´ EHFRPLQJ TXLFNO\ DQG successfully industrialized.
However, this new industry had its grave problems. Behind this idealistic image there are
numerous reports about the problems in the production process, such as the one of the entire set
of cylinder heads being scrapped due to poor casting3, or of domestically produced parts being
RIVXFKORZTXDOLW\WKDW³WKHVDPHHQJLQHZRUNVEHWWHUZLWKWKHROGSDUWV´4. Ambitious plans for
independent development and the results did not quite add up, for in 1949 only three
operational tractors and five trucks were actually built in Yugoslavia.
The solution was found in cooperation with Fiat in 1954. By the early 1960s, the
Yugoslav automobile industry could indeed boast with its highly modern and sophisticated
production facilities, almost entirely based on the technology of the Italian manufacturer Fiat.
During the 1960s Yugoslavia became able to produce in continuously rising series tens of
thousands of passenger and commercial vehicles each year, motorizing the country and at the
same time being able to export its vehicles even on the West European market. And again,
1
Arhiv Jugoslavije, collection 108, Generalna direkcija savezne industrije motora, box 32, archival unit 62 (in
further reference AJ, 108 GDSIM, 32-62), Slogans of the General Directorate of the Federal Motor Industry on the
May 1st parade, 1949.
2
³'ROD]DN0DUãDOD7LWDQDVYHþDQXWULELQXQDURGMHRGXãHYOMHQRSR]GUDYLR³ Politika , May 3, 1949, p. 2
3
AJ, 108 GDSIM, 1-5. Report of TAM (Tovarna Avtomobilov Maribor) factory to the Public Prosecutor Office,
Belgrade, January 4, 1949.
4
AJ. 108 GDSIM, 34-67. Complaint of the Ministry of Local Traffic of the Republic of Bosnia and Herzegovina to
the Main Directorate of the Federal Motor Industry, Sarajevo, February 25, 1949.
5
UHDOLW\ ELW EDFN 7KH <XJRVODY GHOHJDWH¶V RIILFLDO UHSRUW RI WKH %UQR H[KLELWLRQ VWUHVVHG
the fact that Yugoslav cars were ridiculed by visitors for their poor paintjob and craftsmanship,
which were of lower quality even than other Eastern European automobiles.5
What was the actual state of affairs concerning the ability of the Yugoslav automobile
industry to produce passenger automobiles? What were the problems in the process of adopting
Western technology into the socialist-type economy? How were automobiles actually
produced? How much did the process differ from the official plans and declared goals and
results? The highly polarized pairs of images exhibited here do not give complete answers
about the failures and successes on the path of the development of automobile industry in
Yugoslavia, yet they do offer an interesting glimpse into the complexity of the process and
warn that any answer which does not provide an analysis of different aspects of the process is
in effect self-defeating.
The production of automobiles in Yugoslavia, based on the license arrangement with the
Italian manufacturer Fiat, started in 19546 in the Crvena Zastava [The Red Flag] factory in the
former armament facilities in Kragujevac, Serbia. Italy was one of the most important
economic partners of Yugoslavia during the interwar period, and economic relations between
the two countries were quickly reestablished after the Second World War. Following the TitoStalin split in 1948, after which Yugoslavia was left isolated by the Soviet economic boycott,
FRRSHUDWLRQZLWKWKH:HVWTXLFNO\EHFDPHQHFHVVDU\IRUWKHVWDELOLW\RIWKHFRXQWU\¶VHFRQRP\
and the Yugoslav political regime. Another important stimulus for strengthening Yugoslav-
5
$-FROOHFWLRQ8GUXåHQMHSURL]YRÿDþDPRWRUDLPRWRUQLK YR]LOD>$VVRFLDWLRQRI0RWRUDQG0RWRU9HKLFOH
Producers], box 25 (in further reference AJ, 253 UPMMV, 25). Report of Yugoslav delegate on Brno Fair,
September 3, 1961, 1.
6
Assembly of the several models of Fiat started in 1954, but the assembly and the production of the first massproduced model Zastava 600 started in 1955, the same year when the Italian original model Fiat 600 was
introduced, hence in literature both dates can be found as starting years of automobile production in Yugoslavia.
6
Italian cooperation came after the peaceful solution of the Trieste crisis in 1954, followed by a
new contract of economic cooperation in 1955.
With the introduction of the new type of socialist economy in Yugoslavia, based to a
certain extent on market-HFRQRP\ SULQFLSOHV FRPELQHG ZLWK WKH XQLTXH V\VWHP RI ZRUNHUV¶
self-management of the factories, Yugoslavia embarked on a path of fast economic
development. The license agreement with Fiat was one of the most important contracts between
the two countries and, according to Siegelbaum, this was the first commercial arrangement and
an enterprise between a Western corporation and a socialist country in the postwar era. 7 In the
following years the Italian Fiat became the main foreign partner on whose experience and
technical know-KRZWKH<XJRVODYDXWRPRELOHLQGXVWU\ZDVHVWDEOLVKHGDVRQHRIWKHFRXQWU\¶V
biggest and most modern industrial complexes, with growing export capabilities and lucrative
business contracts, acting at the samH WLPH DV D VSHFLILF ³IO\ZKHHO´ RI WKH GHYHORSPHQW DQG
modernization of the entire Yugoslav industry and economy in general.
However, the establishment of a modern automobile industry was not an easy task to
accomplish in a country which even without the devastating effects of the war was one of the
least motorized European countries, and which possessed very limited industrial capabilities
and infrastructure for such development.8 Furthermore, as a predominantly agricultural country,
the overall level of technical culture in Yugoslavia was very low and the country had even less
7
Lewis H. Siegelbaum, Cars for Comrades: The Life of the Soviet Automobile (Cornell University Press, 2008)
88.
8
0DUNR 0LOMNRYLü ³$XWRPRELORP QD -XJRLVWRN ± DXWRPRELOL NDR VUHGVWYR QHPDþNRJ SURGRUD X .UDOMHYLQX
-XJRVODYLMX´>7RZDUGVWKH6RXWKHDVWLQWKH$XWRPRELOH± Automobiles as an Instrument of the German Penetration
in the Kingdom of Yugoslavia], Tokovi istorije, 2 (2011), 62-'DOLERU'HQGD³9RMQLIDNWRULL]JUDGQMDIDEULNH
DXWRPRELODX.UDOMHYLQL-XJRVODYLML´>7KH0LOLWDU\)DFWRUDQGWKH'HYHORSPHQWRIWKH&DU)DFWRU\LQWKH.LQJGRP
of Yugoslavia], Tokovi istorije, 3-4 (2008), 9-27. With only 0.7 automobiles per 1,000 population in 1936, the
Kingdom of Yugoslavia was at the bottom of the list of European countries, with only Bulgaria and Albania having
lower levels of motorization.
7
experienced experts and specialized workers for the autonomous development of the complex
system for producing automobiles on an industrial scale.
The first attempt at establishing the automobile industry in Yugoslavia was in 1939
when several hundred trucks were assembled for military purposes on the license agreement
with the Czechoslovak manufacturer Praga, followed by a similar arrangement with the
American manufacturer Chevrolet whose trucks were assembled in the Kragujevac weapon and
ammunition factory in 1940.9 Immediately after the Second World War, connections with the
Czechoslovak manufacturer were reestablished in an attempt to continue with the production of
trucks on the pre-war agreements.10 There was also a noticeable influence of Soviet experts in
this period. Yet in 1948 this communication ended, and Yugoslavia was increasingly turning
towards Western countries, especially Italy as a possible partner. This cooperation gradually
expanded from the initial contacts to full-blown cooperation and flow of experts and technical
know-how between the two countries in the period after 1955 and the production of the first
passenger car in Yugoslavia. While the production practices of the Italian manufacturer were
based on the American model of automobile production, carefully adapted to the Italian
political and economic environment11, transfer of this model to Yugoslavia necessitated further
and more elaborate adaptation, emerging at the end of this process as a specific Yugoslav
hybrid model, a combination of the socialist and capitalist technocratic thinking and production
practices.
9
'HQGD ³9RMQL IDNWRU L L]JUDGQMD IDEULNH DXWRPRELOD X .UDOMHYLQL -XJRVODYLML´ -24 1HERMãD ĈRNLü
³9RMQRWHKQLþND VDUDGQMD .UDOMHYLQH -XJRVODYLMHL6$'-a´>0LOLWDU\-Technical Cooperation Between Kingdom of
Yugoslavia and the USA], Tokovi istorije, 1-2 (2009), 155-158.
10
%UDQND3USD%UDWLVODY3HWNRYLüHGV Automobil u Beogradu 1918-1941 [Automobile in Belgrade 1918-1941]
%HRJUDG,VWRULMVNLDUKLY%HRJUDGD.DULü)RQGDFLMD0X]HMDXWRPRELOD
11
)UDQFHVFD)DXUL³6XUYLYLQJLQWKH*OREDO0DUNHWµ$PHULFDQL]DWLRQ¶DQGWKH5HODXQFKRI,WDO\¶V&DU,QGXVWU\
after the SHFRQG:RUOG:DU´LQ Contemporary European History 21, no. 1 (February 2012), 41-59.
8
In my thesis, I will explore the problem of the Yugoslav technical and industrial
incapability to autonomously develop its automobile industry, starting with the early
beginnings in 1939, and with emphasis on the period 1955-1962 when the first national
passenger automobile manufacturer was established in the Crvena Zastava factory in
Kragujevac. In 1962 the Crvena Zastava factory opened a new and modern production facility,
which substantially modernized and multiplied its production capacity, and thus 1962 can be
considered as the last year of the formative period of the automobile industry in Yugoslavia. I
will focus both on Yugoslavia's material deficiencies for executing this project and on the
problem of shortage of the skilled workers, experts and technical know-how.
Focusing on the formative period in the Yugoslav automobile industry, in my thesis I
will investigate to what extent this hybrid model of automobile production had an impact on the
GHYHORSPHQW RI WKH FRXQWU\¶V DXWRPRELOH LQGXVWU\ ZKLFK EHFDPH DEOH WR SURGXFH D PRGHUQ
Western-type passenger car, yet overpriced and below Western quality standards. Furthermore,
since the automobile industry through the network of sub-contractors influenced the level of
development of the majority of industrial enterprises in the country, I will argue that the entire
project of establishing a national automobile industry had a great influence in shaping of the
overall process of Yugoslav industrial development.
&RQVLGHULQJ WKH LPSOHPHQWDWLRQ RI WKH <XJRVODY V\VWHP RI WKH ZRUNHUV¶ VHOImanagement of factories, I will investigate the efficiency of this system of organizing industrial
production, which had to reconcile plans for the production introduced by political decisionPDNHUVLQFOXGLQJPLOLWDU\ZRUNHUV¶GHPDQGVSXVKHGIRUZDUGWKURXJKZRUNHUV¶FRXQFLOVDQG
WKH IDFWRU\¶V RZQ PLGGOH DQG KLJK PDQDJHULal structures. I will argue that the failure to
efficiently coordinate different levels of planning and production meant that the emerging
9
model of production was constantly hampered by one, two or all of these agents
simultaneously, and that even though Yugoslavia managed to produce and present to its
SRSXODWLRQ WKH ILUVW VRFLDOLVW SHRSOH¶V FDU WKXV SURYLQJ WKH VXFFHVV RI LWV ³RZQ SDWK´ WR
Communism, the final product in the formative phase of this process was more of a Potemkin
village than a true success story.
The development of automobile industry and the emerging car culture in the Soviet
Union and the socialist countries in the period after the Second World War is a relatively new
topic in historical science, capturing the interest of professional historians only in the last
decade. Yet with already several important monographs and different individual articles and
collections of articles have been published, with Lewis H. Siegelbaum as a pioneer in this field
of research.12 Several authors have made important contributions as well, especially Valentina
Fava on the implementation of Western technology and production practices in the socialist
HFRQRP\LQ&]HFKRVORYDNLDDQG/XPLQLĠD*DWHMHOLQKHULPSRUWDQWFRPSDUDWLYHDQDO\VLVRIWKH
emergence of the automobile culture in the USSR, Romania and GDR. Other authors have
contributed considerably with smaller but equally important case studies.13
On the other hand, the development of the automobile industry in Yugoslavia,
especially the process of the transfer and adaptation of foreign technology to the overall
Yugoslav economic, political and social setting and its impact on changing Yugoslav industrial
practices and strategies of development is a neglected topic, which seldom finds its way into
12
Lewis H. Siegelbaum (ed.), The Socialist Car. Automobility in the Eastern Bloc (Cornell University Press,
2011); Lewis H. Siegelbaum, Cars for Comrades: The Life of the Soviet Automobile , (Cornell University Press,
2008).
13
Valentina Fava, The Socialist People's Car: Automobiles, Shortages And Consent In The Czechoslovak Road To
Mass Production $PVWHUGDP 8QLYHUVLW\ 3UHVV /XPLQLWD *DWHMHO ³7KH 5RDG WR 6RFLDOLVP 3aved with
Good Intentions. Automobile Culture in the Soviet Union, Romania and GDR During DéWHQWH´ LQ Cold War
Cultures. Perspectives on Eastern and Western European Societies , eds. Annette Vowinckel, Marcus M. Payk,
Thomas Lindenberger (New York-Oxford : Berghahn Books, 2012), 152-172; György PéWHUL ³7KH 6WUHHWFDUVRI
Desire: Cars and Automobilism in Communist Hungary (1958-1970), Social History 34, no. 1 (February 2009), 128.
10
the histories of the industrial, economic, or social development of Yugoslavia. The most
important works are primarily focused on the history of automobilism and motorization in the
context of the emerging consumer society in Yugoslavia during the 1970s and 1980s, with Igor
Duda14 as the most prominent author. Other authors have focused on even narrower topics,
such as Jason Vuic's monograph about the rise and fall of the Yugo, the Yugoslav 1980s export
automobile model.15 The role of the Party and government in organizing the management of the
main Yugoslav automobile manufacturer Crvena Zastava, and the effectiveness of these
policies during the late 1970s and 1980s was thoroughly investigated in important articles by
Michael Palairet, yet with no clear insight into the influences on the introduction of foreign
technology and technocratic thinking, and with only a consideration of the top-down view of
the automobile factory as a Party controlled enterprise.16 More serious scientific researches on
the development of the automobile industry in Yugoslavia, the consequences it had on its
economic and political life and on communication with the Eastern bloc countries are yet to be
conducted.
The main sources in my research are the archives of the Crvena Zastava factory and the
main Yugoslav government institutions involved in the process of the development of the
automobile industry and industrialization in general. Using these two types of data
comparatively allowed me to understand the differences between officially proclaimed goals
and results, and the actual achievements and efficiency of the Crvena Zastava factory, both on
the questions of the production process and on technical cooperation with Fiat. Reports from
14
Igor Duda, ProQDÿHQREODJRVWDQMH6YDNRGQHYQLåLYRWLSRWURãDþNDNXOWXUDX+UYDWVNRM -ih i1980-ih [WellBeing Found. Everyday Life and Consumer Culture in Croatia during 1970s and 1980s] (Zagreb: Srednja Europa,
2010).
15
Jason Vuic, The Yugo: the rise and fall of the worst car in history, New York: Hill and Wang, 2009.
16
0LFKDHO3DODLUHW³0LVPDQDJLQJLQQRYDWLRQWKH<XJRFDUHQWHUSULVH-´ Technovation 13(3) (1993):
117-0LFKDHO3DODLUHW³5DPL]6DGLNX$ &DVH6WXG\ LQWKH,QGXVWULDOL]DWLRQRI.RVRYR´ Soviet Studies 44,
no. 5 (1992), 897-912.
11
WKH ZRUNHUV¶ FRXQFLO PHHWLQJV SURYLGHG PH ZLWK LPSRUWDQW information on the role of the
individual in the production process and problems in the adaptation of foreign industrial
practices to the Yugoslav environment. Press-clippings and reviews of Yugoslav and foreign
press in the Open Society Archive on the period 1955-1962 are relatively scarce, but proved to
be useful as additional sources for understanding the Yugoslav government's officially
proclaimed achievements.
Another very valuable group of sources are the factory newspapers and magazines
published intermittently, such as Crvena Zastava , (1948; 1958-1996) and Autoindustrija [Autoindustry], (1970-1974)17, but which contain another point of view of the achievements and
problems in the automobile production in the Crvena Zastava factory. These sources allowed
me to scrutinize and comprehend the process of production from yet another angle. Published
memoirs of the factory workers were an invaluable source of the information on the factory life
and the problems in the production on the shop-floor level.18
The importance of the Yugoslav case goes far beyond just another addition to the
existing corpus of scientific scholarship on the history of the automobile industry and
industrialization in socialism. As a country constantly trying to position itself between two
confrontational super-powers during the Cold War period, and with a specific model of
HFRQRPLF GHYHORSPHQW H[HPSOLILHG LQ WKH FRQFHSW RI WKH ZRUNHUV¶ VHOI-management of the
IDFWRULHV <XJRVODYLD¶V H[SHULHQFH LQ WKH GHYHORSPHQW RI WKH DXWRPRELOH LQGXVtry presents a
very important case-study, opening a variety of new possibilities for an in-depth comparative
17
Even though it was published much later than the period in focus of this research project, it contains important
information on the problems of building the Yugoslav automobile industry in the 1950s and 1960s.
18
0LRPLU0=HþHYLü2SRVOHUDWQRMREQRYLYRMQHLQGXVWULMHLL]JUDGQMLDXWRPRELOVNHSURL]YRGQMHPRMDVHüDQMD
iz Zavoda " Crvena zastava " [After-war Rebuilding of Military Industry and the Establishing of the Automobile
3URGXFWLRQ 0HPRULHV IURP WKH ³5HG )ODJ´ ,QVWLWXWH@ =HPXQ-Kragujevac (2006); *ODVRYL VD UD]PHÿD SRH]LMD
UDGQLND =DYRGD ³&UYHQD =DVWDYD´ >9RLFHV IURP WKH &URVVURDG 3RHWU\ RI WKH ³5HG )ODJ´ ,QVWLWXWH :RUNHUV@
Kragujevac, 1983.
12
analysis of the process of industrialization in socialist countries in general. Investigating the
process of communication between Yugoslavia and Italy in the development of the Yugoslav
automobile industry, I will demonstrate the mechanisms of establishing contacts and dialogue
between socialist and Western countries during the Cold War period. Even though the
Yugoslav case was an exception, it nevertheless could prove to be important for understanding
the necessity and complexity of this kind of communication. Another vitally important result of
WKLV DQDO\VLV ZLOO EH FRPSUHKHQVLRQ RI WKH ,WDOLDQ FRPSDQ\¶V UROH LQ WKH GHYHORSPHQW RI WKH
automobile industry and production practices in Yugoslavia, being dominant partner in the
process of transfer of knowledge.
I will organize my analysis in three chapters. In the first chapter I will conduct the
DQDO\VLVRI<XJRVODYLD¶VLQGXVWULDOKHULWDJHEDVHGXSRQWhe existing secondary literature and on
my previous research. Revealing to what extent Soviet industrial practices were accepted and
applied in Yugoslavia in a period of a few years between the end of the Second World War and
the Tito-Stalin split of 1948 will be an important opening analysis in my second chapter which
will clarify what was the state and the achieved level of industrial development in Yugoslavia
before the transfer of Western (Italian in this case) technology started. In this chapter I will also
LQYHVWLJDWH LQWHQWLRQV EHKLQG WKH <XJRVODY JRYHUQPHQW¶V SROLF\ RI SURGXFLQJ WKH VRFLDOLVW
SHRSOH¶V FDU EDVHG RQ ,WDOLDQ WHFKQRORJ\ DQG HVSHFLDOO\ LQ WKH &ROG :DU FRQWH[W 7KH UROH
managerial structures and party officials had in the process of the development of the Yugoslav
automobile industry is another important aspect which will be addressed in this part. In the
closing part of this chapter I will analyze the process of adaptation of Italian model of
production to the Yugoslav political, economic and social environment, focusing on relations of
the Crvena Zastava factory with its sub-contractors and the impact it had on the quality of the
13
ILQDO SURGXFW 0\ ILQDO FKDSWHU ZLOO EH EDVHG RQ WKH SULPDU\ VRXUFHV RI <XJRVODYLD¶V ILUVW
automobile factory Crvena Zastava. Focusing on the period of 1955-1962 as the formative
phase of the development of this factory, I will analyze the process of implementation and
adaptation of Western technology and production practices on the shop-floor level.
14
I Contextualizing the Development of the A utomobile Industry in Y ugoslavia
7KH LQWURGXFWLRQ DQG LQFRUSRUDWLRQ RI WKH ,WDOLDQ ³FDSLWDOLVW´ WHFKQRORJ\ DQG
technocratic thinking into the socialist economic system in the process of the development of
the Yugoslav automobile industry by definition and common logic necessitated a twofold
adaptation: (1) both foreign technology and production practices had to be adapted to the
Yugoslav political and economic environment, and (2) the existing local production facilities
DQG SUDFWLFHV OHYHO RI ZRUNHUV¶ WHFKQLFDO NQRZOHGJH DQG RUJDQL]DWLRQDO VWUXFWXUH KDG WR EH
adapted in order to accommodate and efficiently employ the new and modern technology. All
this would be impossible without adequate official state policies which would allow for, or
indeed envision the compatible model of industrial development. Even more so, the role of the
state and its institutional framework is especially important in the case of a socialist economic
system with centrally planned economy.
$FFHSWLQJ WKDW ³LQ HYHU\ LQVWDQFH RI LQGXVWULDOL]DWLRQ LPLWDWLRQ RI WKH HYROXWLRQ LQ
DGYDQFHGFRXQWULHVDSSHDUVLQDFRPELQDWLRQZLWKGLIIHUHQWLQGLJHQRXVO\GHWHUPLQHGHOHPHQWV´
DQG WKDW ³>W@KHUH DUH QR IRXU ODQH-highways to the parks of industrLDO SURJUHVV´19, one of the
basic conclusions which can be drawn from the previously expressed premises is that the model
of industrial development in any country is distinct, due to the specific historical background,
industrial heritage, international political and economic climate and policies of the industrial
development. Therefore, the development of the automobile industry in Yugoslavia was unique
and an inherently complex process and its analysis unavoidably calls for multi-layered and
multi-dimensional approach.
19
Alexander Gerschenkron, Economic Backwardness in Historical Perspective (Cambridge, Massachusetts: The
Belknap Press of Cambridge University Press, 1962), 26, 29.
15
1.1
Specific and General: Yugoslav Industrialization in the Context of the Third World
&RXQWULHV¶3RVW-War Development
$FFRUGLQJ WR .RUQDL¶V FODVVLFDO PRGHO RI WKH VRFLDOLVW V\VWHP ³>E@\ DQG ODUJH WKH
advocates of socialist revolution came to SRZHULQFRXQWULHVWKDWKDGEHHQSRRUDQGEDFNZDUG´
and in that sense, their strong push for fast modernization can be understood in the context of
LPSDWLHQFHRIWKH³ODWHDUULYHU´ZKLFKLVFKDUDFWHULVWLFIRUDQ\GHYHORSLQJFRXQWU\DZDUHRILWV
continuous falling behind the developed countries.20 Therefore, leaving aside for the moment
the model of the classical socialist system, the process of the industrial development of
Yugoslavia should be first put into the broader context of the development of the Third World
countries.
%XLOGLQJRQWKH*HUVFKHQNURQ¶VFRQFHSWRIWKHODWHFRPHUFRXQWULHV¶EUHDNLQJRXWRIWKH
³UHODWLYH EDFNZDUGQHVV´ WKURXJK WKH HYHU LQFUHDVLQJ UROH RI WKH VWDWH21, Amsden remarks that
WKRVH7KLUG:RUOGFRXQWULHV¶WKDWGLGPDQDJHWREHFRPe competitive in the world market after
the Second World War, achieved that largely through the implementation of the state control
PHFKDQLVPVDQGSROLFLHVZKLFKDOORZHGWKHPWR³PDNHPDQXIDFWXULQJLQGXVWU\SURILWDEOHDQG
to circumvent any difficulty posed to industrialization by prevailing prices, whether such prices
were politically, technocratically or market GHWHUPLQHG´22. In that sense, while accepting that
the role of the state as important during the process of industrialization, it is limited to the role
of institutional control.
20
János Kornai, The Socialist System. The Political Economy of Communism (Oxford: Clarendon Press 1992),
160.
21
Gerschenkron, Economic Backwardness in Historical Perspective , 5-30.
22
Alice H. Amsden, 7KH 5LVH RI ³7KH 5HVW´ &KDOOHQJHV WR WKH :HVW IURP WKH /DWH -Industrializing Economies
2[IRUG1HZ<RUN2[IRUG8QLYHUVLW\3UHVV>DXWKRU¶VHPSKDVLV@
16
While her analysis is based on the experiences of the Asian and Latin American
countries23, whose development was based on principles of the market rather than planned
economy, for this thesis this framework could nevertheless prove useful in avoiding the trap of
portraying the exceptionality of Yugoslav industrialization, especially when examples of
common experience do exist. Conversely, by liberating the narrative of Yugoslav
industrialization from the confinements of the socialist planned economy system, an approach
ZKLFK LV DOVR UHOHYDQW IRU WKH <XJRVODY FDVH GXH WR WKH FRXQWU\¶V GLVWLQJXLVKLQJ KLVWRULFDO
development the actual specifics of the Yugoslav path of the industrial development could be
effectively emphasized.
On the other hand, it cannot be denied that, even beside several original attempts to
reform its economy on market-oriented principles, Yugoslavia nevertheless retained until its
dissolution in the 1990s the core characteristics of the socialist economic system, notably the
centrally planned mechanism of allocation of capital investments run by highly bureaucratized
Communist Party.24
1.2 Technology Transfer
³7KH SURFHVV RI WHFKQRORJ\ WUDQVIHU LV DV ROG DV FLYLOL]DWLRQ LWVHOI DQG \HW LW GHILHV DQ
easy comprehHQVLRQLQDOOLWVFRPSOH[IRUPV´25 This short sentence emphasizes one of the key
characteristics of the process of technology transfer, namely its complexity and the fact that
each transfer is unique. This, however, does not mean that some sort of a theoretical framework
cannot be established.
23
China, India, Indonesia, South Korea, Argentina, Brazil, Mexico, with addition of Turkey.
Kornai, The Socialist System, passim.
25
*LRUJLR 6LULOOL ³,QWHUQDWLRQDO 7HFKQRORJ\ 7UDQVIHU$Q 2YHUYLHZ ZLWK 6SHFLDO 5HIHUHQFH WR ,WDOLDQ )LUPV´ LQ
Technology and Enterprise in a Historical Perspective , eds. Giovanni Dosi, Renato Giannetti and Pier Angelo
Toninelli (Oxford: Clarendon Press, 1992), 352.
24
17
According to Amsden, in the period after the Second World War, economically
backward countries that managed to develop technologically highly sophisticated industries,
DFKLHYHG VXFK D IHDW RQO\ WKURXJK D SURFHVV RI ³SXUH OHDUQLQJ´ ZKLFK PHDQW ³D WRWDO LQLWLDO
GHSHQGHQFHRQRWKHUFRXQWULHV¶FRPPHUFLDOL]HGWHFKQRORJ\WRHVWDEOLVKPRGHUQLQGXVWU\´ 26 In
RWKHUZRUGVWKLV³SXUHOHDUQLQJ´UHIHUVWRWKHSURFHVVRIWKHWUDQVIHURIWHFKQRORJ\ZKLFKFDQ
DOVREHGHILQHGDVD³Slanned transmission of technology coordinated by a firm or a state with a
VSHFLILF VHW RI JRDOV IRU WKH SURMHFW´27 Other authors have also stressed the fact that the
³WHFKQRORJLFDO FKDQJH LV SHUKDSV WKH PRVW LPSRUWDQW VRXUFH RI VWUXFWXUDO FKDQJH LQ DQ
econRP\´ FDXVLQJ FKDQJHV LQ LQFRPH OHYHOV MRE SRVVLELOLWLHV DQG SRWHQWLDO IRU IXUWKHU
industrial growth through interaction with other industrial sectors.28 Another important general
characteristic of the technology transfer is emphasized by Sirilli who indicDWHGWKDW³WHFKQRORJ\
transfer is typically a continuous process between the transferer and a transferee which goes
well beyond the production start-XS´ ZKHWKHU WKURXJK VXSSO\ RI VSDUH SDUWV WHFKQLFDO
assistance or paying royalties.29 Prior to the analysis of the concept of the transfer of knowledge
and its applicability to the automobile industry in socialist Yugoslavia, it is essential to
GLVWLQJXLVK EHWZHHQ WKH WHUPV ³WHFKQRORJ\´ ³NQRZOHGJH´ DQG ³LQIRUPDWLRQ´ DV D VWDUWLQJ
point in understanding the complexity of the process of the technology transfer.
While information is factual and intelligible and comprises of great number of facts,
NQRZOHGJHLVPRUHFRQFHSWXDODQGWKXVLQFRQFHLYDEOHVLQFH³LWLQYROYHVFRPELQDWLRQRIIDFWV
that interact in intangiEOH ZD\V´30 Therefore, knowledge is broader and more tacit category
26
Amsden, 7KH5LVHRI³7KH5HVW´, 2.
-RQDWKDQ'+DJRRG³:K\ 'RHV7HFKQRORJ\7UDQVIHU)DLO"7ZR7HFKQRORJ\7UDQVIHU 3URMHFWVIURP3HURQLVW
$UJHQWLQD´ Comparative Technology Transfer and Society 4, no. 1 (April 2006): 74.
28
Edward J. Malecki, Technology and Economic Development: The Dyna mics of Local, Regional and National
Change (Essex, England: Willey, 1991), 26, 28.
29
6LULOOL³,QWHUQDWLRQDO7HFKQRORJ\7UDQVIHU$Q2YHUYLHZZLWK6SHFLDO5HIHUHQFHWR,WDOLDQ)LUPV´
30
Amsden, 7KH5LVHRI³7KH5HVW´, 3.
27
18
which in the case of an industrial production can also be explained as an experience gained by
WKHIDFWRU\¶VRULQGXVWU\¶VODERUIRUFHERWKRQWKHVKRS-floor and managerial level) through the
continuing repetition of the production cycles. A further distinction can be made between the
scientific knowledge, as more encompassing and more applicable to different industrial sectors,
and technical knowledge which applies to a specific product or production practice.31 Starting
ZLWK WKLV GLVWLQFWLRQ WKH WHUP ³WHFKQRORJ\´ VKRXOG EH XQGHUVWRRG DV D PXFK ZLGHU FDWHJRU\
ZKLFK LQFRUSRUDWHV ERWK ³LQIRUPDWLRQ´ DQG ³NQRZOHGJH´ $FFRUGLQJ WR 0DOHFNL WKH WHUP
WHFKQRORJ\³HQFRPSDVVHVNQRZOHGJHLQDOOLWVIRUPV´UDQJLQJIURPWKHVLPSOHVWRSHUDWLRQVWR
the enterprise management, and from the use of the machines tooled for mass production to the
³FRPSOH[VFLHQWLILFLQYHVWLJDWLRQVWKDWFUHDWHHYHUQHZHULQYHQWLRQVDQGSURGXFWV´32, and it will
be used in this meaning for the purpose of this thesis.
In the process of economic development based on the transfer of foreign technology,
one of the key problems is that, even when the companies are willing to reveal all the necessary
³LQIRUPDWLRQ´FRQFHUQLQJLWVPRGHUQtechnology, usually they are reluctant to share their tacit
³NQRZOHGJH´ RI WKH SURGXFWLRQ SURFHVV VLQFH LW LV RQH RI WKH FRPSDQ\¶V NH\ DVVHWV 7KLV
reluctance makes any knowledge transfer necessarily imperfect, which is one of the reasons
why companies are usually more inclined to transfer their technology to their subsidiaries
rather than to sell it to other independent companies as potential competitors.33 Furthermore,
the breadth and depth of this knowledge gap is highly dependent on the previous production
experience in the country, which is important concerning both shop-floor level and high
PDQDJHULDO VWUXFWXUHV ,QWKDWVHQVHWKLV³PDQXIDFWXULQJH[SHULHQFH´LV QRW DVLPSOHVWRFNRI
31
Malecki, Technology and Economic Development , 150.
Ibid., 7, 145. Malicki defines technology as a stock of knowledge on what is being made, how it is made,
potential for the development of new or improvement of the existing products, and knowing the market potential.
33
Amsden, 7KH 5LVH RI ³7KH 5HVW´ 6LULOOL ³,QWHUQDWLRQDO 7HFKQRORJ\ 7UDQVIHU $Q 2YHUYLHZ ZLWK 6SHFLDO
Reference to Italian )LUPV´-355.
32
19
NQRZOHGJHEXWRQH³WKDWSDVVHVWKURXJKVSHFLILFKLVWRULFDODQGLQVWLWXWLRQDOILOWHU´ 34, and thus
presents important backdrop that shapes any kind of technology transfer ± the bigger the gap,
the less successful the transfer. There is also a question of the investment level and timing.
While the foreign direct investment (FDI) is the best option for a successful technology
WUDQVIHURYHULQYHVWPHQWRUEDGWLPLQJFDQOHDGWRWKH³FURZGLQJRXW´RIRWKHUORFDOFRPSDQLHV
or industrial sectors.35 Finally, even if all of the mentioned problems are circumvented, this is
never sufficient for a completely successful transfer, and the follow-up investments and effort
by the technology buyer is necessary in the process of adopting and adapting foreign
technology and absorbing the foreign knowledge. In other words, the process of learning
includes not only how to successfully implement the technology, but also which machines to
obtain for further development.36
In practice, the process of learning is highly dependent on the level of previous
manufacturing experience and overall education level, and sometimes it is much faster and
cheaper to hire a foreign engineer than to educate one.37 The process of learning itself is multiOHYHOHG VWDUWLQJ ZLWK ³OHDUQLQJ E\ RSHUDWLQJ´ XVLQJ WKH PDFKLQHU\ DQG WRROV ³OHDUQLQJ E\
FKDQJLQJ´ LPSURYLQJ WKH H[LVWLQJ HTXLSPHQW DQG WHFKQLTXHV RI XVLQJ WKHP ³V\VWHP
SHUIRUPDQFHIHHGEDFN´XQGHUVWDQGLQJZK\ FHUWDLQ WKLQJVZRUNDQGRWKHUVGRQRW³OHDUQLQJ
WKURXJKWUDLQLQJ´QRWRQO\how but also why WKHJLYHQWHFKQRORJ\ZRUNV³OHDUQLQJE\KLULQJ´
(foreign technLFLDQV DQG ³OHDUQLQJ E\ VHDUFKLQJ´ LQGHSHQGHQW UHVHDUFK DQG GHYHORSPHQW38
While these learning techniques and strategies present a range of the possible strategies for
absorbing the foreign technology, in any given case different combination of these techniques
34
Amsden, 7KH5LVHRI³7KH5HVW´, 15-16.
Ibid., 51.
36
Ibid., 56-57.
37
Ibid., 56-59.
38
Malecki, Technology and Economic Development , 146-148.
35
20
can be employed and in various timing sequences, making this learning process unique for any
given factory or industrial sector.
Finally, all that has been so far said about the entire process of technology transfer can
be summed up in couple of sentences.39 The process itself is molded by the national history
perspective and overall international political and economic context of both the transferer and
the transferee. The most important aspect of this backdrop of the technology transfer is the
existing level of technological development between these actors since in instances of a great
technological gap, the entire process may become impossible to successfully implement.
7HFKQRORJ\ WUDQVIHU VWDUWV ZLWK WKH ³UHFRJQLWLRQ´ RI WKH QHHG IRU WKH WUDQVIer, followed by
³FRQVHQVXV´ERWK LQWHUQDO DQGEHWZHHQWKHWUDQVIHUHUDQGWKHWUDQVIHUHH DERXW WKHEHQHILWV RI
PXWXDOFRRSHUDWLRQ7KHQH[WVWHSLVWKHFKRLFHRIWKH³PRGHORIWUDQVIHU´ZKLFKLVIROORZHGE\
WKHLQWURGXFWLRQRIWKHPDLQ³DJHQWVRIWUDQVIHU´, usually one person or a small group of people
(engineers, technicians and skilled workers) capable of bridging the technological gap and who
DUHLQYROYHGLQWKHSURFHVVRI³GLIIXVLRQ´RIWKHDFTXLUHGWHFKQRORJ\IURPWKHDGYDQFHGWRWKH
less developed parWQHU7KHODVWVWHSRIWKHSURFHVVRIWHFKQRORJ\WUDQVIHULV³LPSOHPHQWDWLRQ´
of the acquired technology. The entire process is usually long-lasting and without exceptions
XQLTXH VLQFH WKH DFTXLUHG WHFKQRORJ\ JRHV WKURXJK WKH SURFHVV RI ³DGDSWDWLRQ´ WR WKH
UHFLSLHQW¶VQHHGVDQGWKHRULJLQDOOHYHORIWHFKQLFDOGHYHORSPHQW
39
The following paragraph was based on the theoretical examination on the technology transfer in literature used
for the purposes of writing this sub-chapter, as well as following articles ± 1DWKDQ 5RVHQEHUJ ³Economic
Development and the Transfer of Technology: Some Historical Perspectives´ Technology and Culture 11, no. 4
(October 1970), 550-575 +HQN GH 9HOGH ³3ROLWLFDO 7UDQVIHU$Q ,QWURGXFWLRQ´ European Review of History ±
Revue europèDQQHG¶+LVWRULH 12, no. 2 (July 2005): 205--DQQ\GH-RQJ³¶7KH3ULQFLSOHVRI6WHDP¶3ROLWLFDO
Transfer and Transformation in Japan, 1868-´ European Review of History ± Revue europèDQQHG¶+LVWRULH 12,
no. 2 (July 2005): 269-290. Even though these articles are focused on the political (or cultural) and not
technological transfer, their authors offer some important general insights on the theory of transfer which can be
successively applied for the purposes of this thesis. Terms under quotation marks refer to the theoretical
terminology, explained in this paragraph which will be used in the rest of this thesis.
21
As a result, whatever the officially proclaimed policies might have been, on the practical
level and with so many different components and variables shaping this process, any kind of
lineaU WHFKQRORJLF GHYHORSPHQW RU ³OHDSIURJJLQJ´ ZKLOH WKHRUHWLFDOO\ SRVVLEOH LQ UHDOLW\ ZDV
extremely difficult to achieve. Closely related to this, it seems more likely that the course of
development might follow the pre-established paths and practices based on the achieved level
of manufacturing experience, ranging anywhere between complete inability to adopt the new
knowledge, thus rendering the process of technology transfer as a failure, or its embrace as an
almost natural superstructure.
Finally, the course of industrial development in any given country eventually depends
on the behavior of the people who are involved as the first-hand actors of technological change,
building of the new industrial complexes or establishing new manufacturing practices, whether
as manual, slow-skilled labor or highly educated technicians and managers. The intricate
network of different economic, political, regional, local and socio-cultural interests and
practices of all of these groups have profound impacts on the official policies and the feasibility
of even the most elaborate plans and projects of economic development. Thus, the social
FRPSRQHQW RI WKH SURFHVV RI WKH LQGXVWULDO GHYHORSPHQW ³LV QRW PHUHO\ D FRPSOHPHQW WR WKH
SROLWLFDO QDUUDWLYH EXW WUDQVIRUPDWLRQ RI LW´ ZKLFK ³GRHV QRW VLPSO\ VKRZ XV ZKDW HOVH ZDV
JRLQJRQEDFNVWDJHEXWUHFDVWVDQGUHZULWHVWKHHQWLUHSOD\´40
In cases of the socialist countries, with their emphasis on importance of the working
class as a revolutionary agent, the most logical starting point in the analysis of the process of
the industrial development is to understand the role of the industrial working class in this
SURFHVV$FFRUGLQJWR.HQQH\¶VVWXG\RIWKHFUHDWLRQRIWKHZRUNLQJFODVVLQ3RODQGLQWKHODWH
40
Padraic Kenney, Rebuilding Poland: Workers and Communists, 1945-1950 (Ithaca and London: Cornell
University Press, 1997), 3.
22
1940s, working class can be defiQHG DV D FRPPXQLW\ ³IRXQGHG RQ VKDUHG ZRUN H[SHULHQFH
FXOWXUDOULWXDOVDQGXUEDQVWUXFWXUHV´RULQRWKHUZRUGVZRUNLQJFODVVFDQEHXQGHUVWRRGDVDQ
identity.41 At the same time, the way workers understood their identity and how the Party
perceived it waV HVVHQWLDOO\ YHU\ GLIIHUHQW :KLOH WKH RIILFLDOO\ SURFODLPHG ZRUNHU¶V LGHQWLW\
was both highly homogenized and idealized and based on the idealtypus of the skilled and
class-FRQVFLRXV ZRUNHU LQ UHDOLW\ WKLV ³LPDJLQDU\ ZRUNLQJ FODVV´ ZDV KLJKO\ GLYHUVLILHd both
UHJLRQDOO\ DQG ZLWKLQ D VLQJOH IDFWRU\ ,W ZRXOG EH PRUH VXLWDEOH WR VSHDN DERXW D ³FRPSOH[
VSHFWUXP RI ZRUNHU LGHQWLWLHV´ UDWKHU WKDQ RQH VLQJOH LGHQWLW\ 42 Socio-cultural divide among
workers ranged between the discourses of generation, gender, rural-urban divide, educational
and political divide, all of which were the obstacles the Party and the government had to
negotiate on everyday basis in communication with the workers.43
1.3 The Automobile Industry as a Leading Sector of Industrialization
AccRUGLQJ WR 5RVWRZ¶V FODVVLF WKHRU\ LPSRUWDQW FRQGLWLRQ IRU VXVWDLQDEOH
LQGXVWULDOL]DWLRQ LV H[LVWHQFH RI WKH ³OHDGLQJ VHFWRU´44. It is defined as a sector that is able to
produce commodity which is in high demand; that has been introduced with new production
functions combined with expansion of productive capacities; that is supported in the initial
phase of development by adequate capital investments (no matter its source) with constant
reinvestment in further development. Most importantly, the leading sectRULVDEOHWRSURGXFH³D
FKDLQ RI UHTXLUHPHQWV IRU LQFUHDVHG FDSDFLW\ >«@ WR ZKLFK WKH VRFLHW\ >«@ SURJUHVVLYHO\
41
Kenney, Rebuilding Poland, 6-7.
Mark Pittaway, 7KH :RUNHUV¶ 6WDWH ,QGXVWULDO /DERU DQG WKH 0DNLQJ RI 6RFLDOLVW +XQJDU\ -1958
(Pittsburg: University of Pittsburg Press, 2012), 14-15.
43
Pittaway, 7KH:RUNHUV¶6WDWH, 13-16; Kenney, Rebuilding Poland, 6-12.
44
Walt Whitman Rostow, The Stages of Economic Growth. A Non-Communist Manifesto, 3rd ed. (Cambridge:
Cambridge University Press, 1991), 52-57.
42
23
UHVSRQGV´45. However, in the cases of the industrialization of the Third World countries in the
SHULRGDIWHUWKH6HFRQG:RUOG:DU³DVKRWJXQUDther than rifle approach prevailed to kick-start
LQGXVWULDOL]DWLRQ´VLQFH³LQGXVWULHVZLWKdynamic comparative advantage could not be identified
as such ex ante ´HYHQWKRXJKDIWHUWKLV³LGHQWLILFDWLRQ´WKHVHFRXQWULHVDOVRSXUVXHGSROLF\RI
FUHDWLQJ³QDWLRQDOOHDGHUV´46
While historically in different countries various industries played the role of the leading
sector, it is necessary to underline the fact that the automobile industry is one of few industrial
sectors with great potential for linking with other industrial branches, such as steel, glass,
chemical, machine and electronic industry, thus causing the spin-off effect.47 Because of this
capability, throughout the 20th century the automobile industry was, according to Freyssenet,
considered as the mRVWLPSRUWDQWPDQXIDFWXULQJLQGXVWU\³WKHPDMRUHQJLQHRIJURZWKXQWLOWKH
PLGGOH V´ DQG HYHQ WRGD\ LV VHHQ DV LPSRUWDQW FRQWULEXWRU RI LQGXVWULDO GHYHORSPHQW48
$PVGHQDVZHOOLGHQWLILHVWKHDXWRPRELOHLQGXVWU\DVRQHRIWKH³KRWLQGXVWULHV´LQWKHSrocess
of postwar industrialization of the Third World countries, with differences appearing in single
countries only in subbranches of these sectors.49 Therefore, choosing to develop the automobile
LQGXVWU\ ZLWK LWV JUHDW SRWHQWLDO RI EHFRPLQJ WKH ³OHDGLQJ VHFWRU´ RU ³KRW LQGXVWU\´ FDQ EH
regarded as a credible and logical strategy in the process of industrial development. In addition,
WKH 7KLUG :RUOG FRXQWULHV WHQGHG WR FUHDWH ³QDWLRQDO ILUP OHDGHUV´ XVXDOO\ WKURXJK D
³JRYHUQPHQW SURPRWLRQ´ DQG RQ SULQFLSles either of grouping facilities with previous
45
Rostow, The Stages of Economic Growth, 57.
Amsden, 7KH5LVHRI³7KH5HVW´, 136, 140.. The term dyna mic comparative advantage, is used by Amsden to
distinguish the manufacturing industries based on modern technology, from those export commodities which
previously existed (static comparative advantage) which are in her theory is closer to the Ricardian concept
>DXWKRU¶VHPSKDVLV@
47
Douglas C. Bennet, Kenneth E. Sharpe, Transnational Corporations Versus the State: The Political Economy of
the Mexican Auto Industry (Princeton, New Jersey: Princeton University Press, 1985), 14.
48
Peter Dicken, Global Shift: Mapping the Changing Contours of the World Economy , 5th ed. (New York, London:
The Guilford Press, 2007), 278.
49
Amsden, 7KH5LVHRI³7KH5HVW´, 138.
46
24
H[SHULHQFH RI JRYHUQPHQWDO FRQWURO RU RQ FUHDWLQJ D ³VWDWH VSLQ-RII´ HQWHUSULVH EDVHG RQ
cooperation with a foreign technologically advanced partner.50 Bearing this in mind it would be
necessary to understand which grand strategies of industrialization were available to Yugoslav
officials in forming of their official policies.
There
are
basically
two
strategies
of
industrialization,
namely
export-led
industrialization (ELI) and import substitution industrialization (ISI), with great deal of
country-specific variations in policies of applying these strategies. In the case of ELI, the
production is in general set to meet the expectations of the foreign (or world) market, while in
case of ISI, countries tended to develop production of commodities for the local market in order
WR VXEVWLWXWH IRU LPSRUWHG JRRGV DQG WKXV EDODQFH WKH FRXQWU\¶V WUDGH51 While export of
manufactured goods is the prime goal of any economy (not only developing), the postwar
experience of WKH 7KLUG :RUOG FRXQWULHV VKRZV WKDW ³>L@PSRUW VXEVWLWXWLRQ LQGXVWULDOL]DWLRQ
preceded exporting in almost all industries, whatever the average bias at the aggregate level
EHWZHHQH[SRUWLQJRUVHOOLQJDWKRPH´52 Furthermore, it is important to stress the fact that the
focus on import substitution concept does not exclude export of the manufactured goods to the
world market, but the problem is that trading is usually hampered by tariff or non-tariff trading
barriers, raised in order to protect the infant indXVWU\ 7KH LPSRUWDQW WKLQJ LV WKDW ³DV QHZ
LQGXVWULHVHPHUJHGQHZWUDGLQJUHJLPHVHPHUJHGWRVXSSRUWWKHP´WKHUHIRUHPDNLQJ,6,UDWKHU
ambiguous strategy within which policy makers had to continuously reconcile the desire to
50
Amsden, The Rise RI³7KH5HVW´,QDGGLWLRQWRWKLVPRGHO³QDWLRQDOOHDGHU´ILUPFRXOGEHEDVHGDOVRRQD
FRPELQDWLRQRIVWDWHSULYDWHDQGIRUHLJQFDSLWDOGHIHQVHLQGXVWU\IDFLOLW\SULYDWHHQWHUSULVH³FURZGHGLQ´E\VWDWH
owned enterprise; small firm created by state institute.
51
This conclusion is oversimplified for the purpose of this text, but still does not means that it is inaccurate. For a
more detailed analysis of sub-variants of strategies please refer to Dieter Senghaas, The European Experience: A
Historical Critique of Developmental Theory, trans. K. H. Kimmig (Leamington Spa/Dover, New Hampshire:
Berg Publishers, 1985), 13-+XEHUW6FKPLW] ³,QGXVWULDOL]DWLRQ6WUDWHJLHVLQ /HVV'HYHORSHG&RXQWULHV6RPH
/HVVRQVRI+LVWRULFDO([SHULHQFH´Journal of Development Studies 21, no. 1 (October 1984): 1-21.
52
Amsden, 7KH5LVHRI³7KH5HVW´, 171.
25
protect local producers from fRUHLJQ FRPSHWLWRUV ZLWK WKH QHFHVVDU\ VXSSRUW RI WKH FRXQWU\¶V
export.53
Concerning the strategies employed in the development of the automobile industry, the
historical evidence from the Association of Southeast Asian Nations (ASEAN) countries shows
that DOORIWKHP³LQLWLDOO\FUDIWHGDQLPSRUWVXEVWLWXWLRQDXWRLQGXVWULDOVWUDWHJ\´FRPELQHGZLWK
adequate policies aimed in protecting local market and production.54 This path of automobile
industry building was also followed by Mexico which in the course of years between 1960 and
1980 evolved from small operation of imported automobile kit-assemblers to one of the major
exporters in the world automobile market.55 On the other hand, in socialist countries, except for
Czechoslovakia and the German Democratic Republic (GDR) as countries which had highly
developed automobile industries already in the pre-socialist (interwar) period, the automobile
industry only in the late 1960s and 1970s became important manufacturing sector, and even
then eventually was based on the basic principles of ISI. Both of these frameworks can be
applied as analytical tools for examining the development of automobile industry in
Yugoslavia.
1.4 Models of Automobile Production
Important for understanding the policy-choices made by the Yugoslav government is
the question of available models on which the development of the automobile industry could be
EDVHG VLQFH LW FDQ EH DUJXHG WKDW ³ERUURZHG WHFKQRORJ\´ LV ³RQH RI WKH SULPDU\ IDFWRUV
assuring a high speed of development in a backward country entering the stage of
53
Amsden, 7KH5LVHRI³7KH5HVW´, 173-174.
.XQLNR )XMLWD 5LFKDUG &KLOG +LOO ³$XWR ,QGXVWULDOL]DWLRQ LQ 6RXWKHDVW $VLD 1DWLRQDO 6WUDWHJLHV DQG /RFDO
'HYHORSPHQW´ AS EAN Economic Bulletin 13, no. 3 (March 1997): 313.
55
Bennet and Sharpe, Transnational Corporations Versus the State , 3.
54
26
LQGXVWULDOL]DWLRQ´56$PVGHQDJUHHVE\HPSKDVL]LQJWKDW³>D@WHFKQRORJ\WUDQVIHUZDVDOZD\VD
QHFHVVDU\FRQGLWLRQIRUODWHLQGXVWULDOL]DWLRQ´HYHQWKRXJKLWZDV³QHYHUVXIILFLHQWRQH´ 57 But
the first question to be answered is how many different models of automobile production
actually existed in 1950s.
By far the most successful model of automobile production at that time was the
American. The basic premises of the American model of mass production of cheap and reliable
automobiles were the continuously moving assembly line, interchangeability of parts, use of
high-quality and high-end machine tools manned by cheap unskilled labor and decentralized
divisions producing components with the support of the research and marketing departments.58
,QJHQHUDOOLWHUDWXUHWKLVPRGHOLVXVXDOO\UHIHUUHGWRDV³)RUGLVP´VLQFHLWZDVHQYLVLRQHGDQG
implemented by Henry Ford in his automobile factory. Organized on this model, the American
automobile industry experienced its heyday in 1955 with almost 7 million automobiles
produced, which constituted nearly 75% of the world automobile production. In combination
with the devastating effects of the Second World War on the European automobile industry, the
American model was practically the only working model for establishing the successful and
competitive automobile industry, and it actually was extensively copied across Western Europe
during the 1950s.59
The American model was also copied by the Soviet Union already during the 1930s
when entire factories were made in cooperation with American experts, and similarly the first
models of Soviet passenger cars after the Second World War were basically American models
56
Gerschenkron, Economic Backwardness in Historical Perspective , 9.
Amsden, 7KH5LVHRI³7KH5HVW´, 52.
58
James P. Womack, Daniel T. Jones, Daniel Ross, The Machine That Chaged the World: How Japan's Secret
Weapon in the Global Auto Wars Will Revolutionize Western Industry (New York, NY: Harper Perennial, 1991),
27-40.
59
Womack, Jones and Ross, The Machine That Changed the World, 43-47; David W. Jones, Mass Motorization
and Mass Transit : an American history and policy analysis (Bloomington: Indiana University Press, 2008), 27; 48
57
27
of automobiles, reverse engineered by Soviet experts.60 The Soviet automobile industry after
the war was equipped by German machinery procured as war reparations, and at the same time
with the American tools and machines acquired through the wartime deliveries.61 However,
³)RUGLVP´LQWKH6RYLHW8QLRQE\WKHVEHFDPH³DFDULFDWXUHRIWKHRULJLQDOYHUVLRQ´ZLWK
factories focusing only on the maximum output, neglecting other more important components
of mass production.62
In the early stages of the Cold War, Czechoslovakia as a country with one of the most
developed automobile industries in Europe and prior to the consolidation of the Communist
Party in the country, made elaborate plans of restructuring its automobile industry based on the
American model and with great assistance of the American engineers.63 Even though these
plans were soon shelved, it is a remarkable example of the dominance and popularity of the
American model of automobile production even within the ranks of the Eastern bloc countries.
60
Siegelbaum, Cars for Comrades 9DOHQWLQD )DYD ³%HWZHHQ$PHULFDQ )RUGLVP DQG 6RYLHW )RUGLVP
&]HFKRVORYDN:D\7RZDUGVWKH0DVV3URGXFWLRQ´LQ The Sovietization of Eastern Europe: New Perspectives on
the Postwar Period, eds. Balász Apor, Péter Apor, E. A. Rees (Washington: New Academia Publishing 2008, 48.
61
James M. Laux, The European Automobile Industry (New York: Twayne Publishers, 1992), 173.
62
)DYD³%HWZHHQ$PHULFDQ)RUGLVPDQG
6RYLHW)RUGLVP
&]HFKRVORYDN:D\7RZDUGVWKH0DVV3URGXFWLRQ´4850.
63
9DOHQWLQD)DYD³&20(&21,QWHJUDWLRQDQGWKH$XWRPRELOH,QGXVWU\7KH&]HFKRVORYDN&DVH´ E UI Working
Papers 0:31R9DOHQWLQD)DYD³%HWZHHQ$PHULFDQ)RUGLVPDQG
6RYLHW)RUGLVP
&]HFKRVORYDN
:D\7RZDUGVWKH0DVV3URGXFWLRQ´-53.
28
I I T he Y ugoslav Industrial H eritage, 1918-1941
The Kingdom of Yugoslavia in 1918 presented a patchwork of highly diverse states,
regions and nations inhabiting these territories. This meant that the celebrated unification of
South Slavs in reality was nothing more than the beginning of the long process of creating a
unified country, or at least one clearly defined political entity. All of these problems and
REVWDFOHV ZHUH YLVLEOH LQ HYHU\ DVSHFW RI WKH FRXQWU\¶V H[LVWHQFH ,Q SXUH SROLWLFDO-economic
WHUPV LW LV HQRXJK WR DFNQRZOHGJH WKDW WKH <XJRVODY JRYHUQPHQW KDG WR KDUPRQL]H ³VL[
different customs areas, five currencies, four railway networks, three types of banking systems,
WZR JRYHUQPHQWV´ ZKLOH LW FRXOG UHO\ RQ RQO\ ³RQH UHODWLYH DGYDQWDJH LQ IRUHLJQ WUDGH
OLYHVWRFN´64 Unsurprisingly, most of these different systems were more often than not in
GLUHFW FRQIOLFW ZLWK HDFK RWKHU ZKLFK RQ WKH ERWWRP OLQH DW OHDVW VORZHG GRZQ WKH FRXQWU\¶V
HFRQRPLFGHYHORSPHQW$WWKHVDPHWLPHWKHSURFHVVRIRYHUFRPLQJWKHVH³LQLWLDOGLIILFXOWLHV´
ZDV SDLQIXOO\ VORZ DQG WKXV FUHDWHG ³VWUXFWXUDO DQG UHJLRQDO LQHTXDOLWLHV´ DPRQJ IRUPHU
Yugoslav countries, which are visible even today.65 The Industrialization of the country in this
kind of environment was a tedious task.
2.1 Industrialization of Yugoslavia during the Interwar Period
According to BeUHQGLQWKHSHULRGDIWHUWKH)LUVW:RUOG:DUWKH(XURSHDQ³SHULSKHUDO
FRXQWULHV´ DEDQGRQHG WKH SUH-war concept of ELI since the competition on the open market
with industrially developed countries proved to be an unsuccessful strategy of economic
64
-RKQ 5 /DPSH ³8QLI\LQJ WKH <XJRVODY (FRQRP\ - 0LVHU\ DQG (DUO\ 0LVXQGHUVWDQGLQJV´ LQ D.
ĈRUÿHYLü The Creation of Yugoslavia, 1914-1918 (Santa Barbara 1980), 139. Quoted in Mari-äDQLQ ýDOLü
Socijalna istorija S rbije 1815-1941: Usporeni napredak u industrijalizaciji [Social History of Serbia 1815-1941.
S low-Paced Progress of Industrialization] (Belgrade: Clio), 2004, 206.
65
ýDOLüSocijalna istorija S rbije 1815-1941, 207.
29
development. Instead they applied the concept of ISI, aiming at self-sufficiency, thus
equalizing economic with newly gained political independence. 66 As a result, high protective
tariffs and quotas on imported goods, state interventionism and state ownership of industry
³EHFDPHSRSXODU´67
The policy of economic development in the newly created Kingdom of Yugoslavia was
DOVR ³RQH RI KLJKO\-SURWHFWHG LQGXVWULDOL]DWLRQ´ ZLWK SURWHFWLYH EDUULHUV UDLVHG RQ LPSRUWHG
goods in order to stimulate its own industrial development and protect it from foreign
competition.68 However, due to great interregional differences in the structure of the existing
industrial capacities and their initial level of development, these protective measures were
changing on a yearly basis, rendering the whole system relatively inefficient. For example,
some of the existing and relatively competitive industrial branches were protected from foreign
competition, while at the same time importing new machines, which could have increased
existing industrial capacities, became too expensive, thus hampering industrial development in
general.69 &XVWRPV DQG RWKHU W\SHV RI SURWHFWLRQLVW PHDVXUHV LQ <XJRVODYLD ³SDUWLFXODUO\
IDYRUHG WH[WLOHV OHDWKHU KLGHV PHWDO DQG RWKHU JHQHUDO FRQVXPHU IRRGV LQGXVWULHV´ DV these
were the most developed industrial branches in the country and most competitive in the
market.70 Yugoslav industrial products were as a consequence highly priced, but usually not of
66
Ivan T. Berend, Ekonomska istorija Evrope u XX veku. Ekonomski modeli od laissez-faire do globalizacije [An
Economic History of Twentieth-Century Europe. Economic Regimes from Laissez-Faire to Globalization]
(Belgrade: Arhipelag 2009), 70- (YHQ WKRXJK %HUHQG DYRLGV GHILQLQJ WKH WHUP ³SHULSKHUDO VWDWHV´ IURP WKH
context of his text it is evident that he is talking about countries of Central and Eastern Europe.
67
Berend, Ekonomska istorija Evrope u XX veku, 70, 74.
68
5XGROI %LüDQLü Economic Policy in Socialist Yugoslavia (Cambridge: Cambridge University Press, 1973), 8;
ýDOLü, 274.
69
ýDOLü-277.
70
%LüDQLü-9.
30
equally high quality, while at the same time existing producers were not motivated to introduce
more rational or efficient production techniques or technologies.71
Structural problems were also some of the reasons why the introduction of modern
technologies was unsuccessful, if not altogether impossible, and structural problems
particularly affected the development of heavy industry. Due to an inadequate road and railroad
network, as well as an inefficient electric network, it was often impossible to introduce the
technologically most modern machinery, and even in places where it was possible, the factories
were poorly connected to domestic or foreign markets.72 Combined with the lack of know-how
and adequate workforce (more in chapter 2.2) and a consistent lack of capital for investments,
these conditions created a paradoxical situation. For example, Yugoslavia was exporting iron
ore in its crudest form and importing steel and pig iron since this was cheaper than to produce it
in the country.73 While this imposed a heavy burden on the Yugoslav balance of payments, it
also was one of the reasons why in the interwar period Yugoslavia imported cheap and
outdated technologies and machinery, sometimes even more suited for a museum than for an
industrial facility.74 This statement may be too harsh, but the case of Kingdom of Yugoslavia
QRQHWKHOHVV FRQWUDGLFWV *HUVFKHQNURQ¶V RSWLPLVWLF DVVXPSWLRQ WKDW ODWHFRPHUV LQ
industrialization could benefit from the introduction of the most advanced technologies.75
Despite the previous statements, some tangible results in the industrialization of the
country were achieved, especially in the first couple of years after the war when the inflationary
SUHVVXUHIRUFHGWKHFDSLWDORXWRIWKHVDYLQJVDFFRXQWVLQWR³LQWHQVLYHLQYHVWPHQWV´LQLQGXVWULDO
capacities. It is estimated that 31% of new factories and 40% of working places created during
71
ýDOLü, 277.
Ibid., 255-257.
73
Ibid.
74
Ibid., 257-258.
75
Gerschenkron, 8-10; ýDOLü
72
31
the entire interwar period were opened in the first five years after the creation of Yugoslavia,
with the year 1922 holding the record for the whole period with 170 new factories.76
However, these numbers do not tell the whole story. The situation behind all of the
³VXFFHVVHV´ DQG SUREOHPV RI LQGXVWULDOL]DWLRQ LQ WKH .LQJGRP RI <XJRVODYLD ZDV WKDW WKH
productivity of these factories was only three times higher than in craft workshops.77
Furthermore, the Handicraft Law in 1931 proscribed that workshops of at least 15 workers with
motorized machinery, or 25 without, were to be recognized as industrial facilities.78 This shows
that much of the existing industrial facilities were in fact nothing more than enlarged
workshops, and the fact that even those installations without any kind of motorized machinery
were designated as industrial prove this conclusion. Most of these factories were equipped with
outdated machinery manned by equally inadequate workforce, and with underdeveloped
infrastructure, which did not allow them to connect with markets in the country and abroad.
On the other hand, a few modern industrial facilities did exist. A good example is the
%DWD VKRH IDFWRU\ 7KH ³%DWD´ IDFWRU\ ZDV HVWDEOLVKHG LQ LQ %RURvo [Croatia] with
Czechoslovak capital and was one of the first factories to start mass production of cheap
consumer goods in Yugoslavia, predominantly based on modern machinery manned by lowpaid and uneducated workforce, all of which were well known components of the system of
³VFLHQWLILFPDQDJHPHQW´³7D\ORULVP´DVGHILQHGE\)UHGHULFN7D\ORU$GYDQFHGWHFKQRORJ\
DQGWKHPRGHUQRUJDQL]DWLRQRISURGXFWLRQDOORZHG³%DWD´WRTXLFNO\EHFRPHWKHOHDGLQJVKRH
manufacturer in Yugoslavia with complete monopoly of the market ± by 1940 it had more than
76
ýDOLü-209; %LüDQLü,QIODWLRQLQHIIHFWORZHUHGWKHSURGXFWLRQFRVWVWD[EXUGHQVDQG³PHOWHGDZD\´DQ\
debts, while at the same time made savings insecure, thus forcing the capital out of the banks and into investments.
77
ýDOLü
78
Ibid., 211.
32
500 shops and 200 small handicraft workshops cross-OLQNHG LQWR D JLDQW QHWZRUN RI ³%DWD¶V´
supplement producers.79
The story of the Bata shoe factory is one of the few isolated success stories of Yugoslav
interwar industrialization. Nonetheless, it also reveals how uncompetitive the Yugoslav
industry actually was and how easily a single factory, which was technologically and
organizationally similar to other big European factories, could control one whole industrial
sector in the country. It also confirms that Yugoslav capital was in short supply and was not in
a position to compete with foreign investments.
At the same time, foreign owners of facilities or capital investors were predominantly
interested in exporting the profit to the country of their origin, and not necessarily in raising the
ZRUNHUV¶ HGXFDWLRQDO OHYHO RU WKH FRXQWU\¶V OHYHO LQGXVWULDOL]DWLRQ HYHQ WKRXJK VRPH
improvements in these aspects were unavoidable, if only in isolated enclaves.80 This notion
points to another problem of Yugoslav interwar industrialization, namely that by 1938, 51.5%
of the entire industrial capital in Yugoslavia had been under foreign control in one way or
another, the effects of which could not have been beneficial for Yugoslav industry.81 This
scenario had all the basic elements of classic dependency theory, but in any case made the
Yugoslav policy of autarchic development through ISI impossible to realize without the
creation of the new domestic capital or without prolonged and aggressive state intervention and
investments.82
79
ýDOLü-264.
'LMDQD 3OHãWLQD Regional Development in Communist Yugoslavia (Boulder, San Francisco, Oxford: Westview
Press, 1992), 13; ýDOLü-274.
81
ýDOLü 273.
82
Detailed overview of the development and basic assumptions on dependency theory can be found in Alvin Y.
So, Social change and development: modernization, dependency, and world-systems theories (Newbury Park,
Calif.: Sage Publications, 1990), 91-165.
80
33
Emphasized by the Great Depression, these problems of Yugoslav industrialization were
to a certain extent solved through state intervention during the late 1930s, which was in any
case part of the League oI 1DWLRQV¶ VXJJHVWLRQV WR WKH FRXQWULHV RI (DVWHUQ DQG 6RXWKHDVWHUQ
Europe for solving the internal economic crisis.83 The Yugoslav government started in 1935 the
ambitious program of public works, especially road and railroad building, but the effects were
not too great since a large part of investment funds eventually ended up in the military buildup
as a response to ever increasing political crisis in Europe in the late 1930s.84
At the same time, previous policies of autarchic industrial development were only
strengthened as a consequence of the Great Depression and the upcoming war, when most
European countries, especially in Eastern and Central Europe, tried to take control of their
economy and in particular their industry through state-owned companies. At first, this was a
forced measure initiated in order to prevent the collapse of the most important banks, producing
or exporting sectors of the economy, but eventually became part of the war preparations, where
most of the heavy and machine industry came under direct state control or ownership.85
In Yugoslavia, by 1939 more than 35% of coal and 90% of iron mines were stateowned, while at the same time, the state established 52 different industrial facilities,
supplemented with another 88 companies created by local governments.86 Most of these
companies were controlling heavy industry facilities, and unsurprisingly were directly or
indirectly connected to the military buildup program. One of the examples was the ironworks
facility in Zenica [Central Bosnia] ZKLFK E\ HYROYHG LQWR WKH LQGXVWULDO JLDQW -XJRþHOLN
[Yugo-Steel], thus connecting the most important Yugoslav ironworks, coal and iron ore
83
ýDOLü
Ibid., 383-386.
85
Berend, 82-87.
86
Berend, 86; ýDOLü
84
34
mines.87 Many other economy sectors experienced similar development, and the main result of
this policy was that by 1939 roughly 15% of the industrial capital in Yugoslavia was stateowned.88 In combination with state monopolies, state-owned companies and enterprises
SURGXFHGPRUHWKDQKDOIRI<XJRVODYLD¶VWRWDO VWDWHEXGJHW LQFRPHDQG DW WKHVDPHWLPHWKH
state became one of the biggest employers in the country. With the start of the war, state
intervention and control of the economy further progressed, and by 1941 more than 80% of the
Yugoslav economy was either directly owned or in some other way controlled by the state.89
Throughout the interwar period, the Yugoslav government had tried to develop as much
as possible its self-sufficient economy in which industrialization was continuously an important
part of the project. These initial incentives were further strengthened by the impact of the Great
'HSUHVVLRQ DQG WKH SROLWLFDO FULVLV LQ (XURSH DIWHU +LWOHU¶V ULVH WR SRZHU +RZHYHU ZLWK WKLV
difficult point of departure in the process of industrialization, constant lack of capital,
inadequate workforce and infrastructure, this was not an easy goal to achieve. Combined with
the rising fear of an upcoming war, the Yugoslav government eventually resorted to broad state
interventionism taking almost full control of the entire economy, especially sectors of heavy
and military industry.
2.2 Industrial Workers in Yugoslavia
The development of the working class in Yugoslavia during the interwar period was a
slow and ambiguous process. Without much change throughout the period, Yugoslavia
87
ýDOLü 388-389.
Throughout the interwar period, Yugoslav government was constantly increasing the number of state monopolies
(salt, tobacco, sugar, weaponry, etc.) and at the same time expanding their activities. ýDOLü
89
Ibid., 385, 390-391.
88
35
remained a highly agricultural country, with a roughly 75-78% peasant population.90
Furthermore, due to the specific historical development of Serbia and predominantly for
political purposes, successive governments from the 19th century and right until the start of the
Second World War, continuously guaranteed by the law the existential minimum of the peasant
land and property which could not lost to a debt.91 Consequently, this meant that without the
DGHTXDWH³SXVK´IDFWRUWKHUHZHUHIHZODQGOHVVSHDVDQWVWREHGUDZQLQWRIDFWRULHVDVDFKHDp
labor. According to official statistics, only 2-3% of agricultural workers were landless, and
among the European countries, only in Bulgaria was this percentage lower. 92 Combined with
the slow-paced industrialization process in the interwar period which in any case could not
HPSOR\DPXFKODUJHUZRUNIRUFHWKH³SXOO´IDFWRUZDVODFNLQJDVZHOODQGWKHSHDVDQWVRQO\
gradually and reluctantly entered the factories.
This gradual shift in the employment structure in Yugoslavia meant that in the 1930s up
to 80% of industrial workers in the least developed areas, and almost 40-60% of them on
average, never cut the umbilical cord with village life, usually having their families
continuously living in villages, while they were working in factories. 93 According to ýDOLü
WKHVH ³ZRUNHUV´ ZKR LQ SUDFWLFH ZHUH QRWKLQJ PRUH WKDQ KLUHG VHDVRQDO ODERU LQ LQGXVWU\
VKRXOGEHUHIHUUHGWRDV³LQGXVWULDOL]HGSHDVDQWU\´DWHUPWKDWVHHPVWREHTXLWHVXLWDEOH94
Another key problem in the process in finding workers during the interwar period was
the extremely poor education level in the general, but especially among peasants. According to
the official data, right before the start of the Second World War, the illiteracy rate was 44.6%,
90
3OHãWLQD%UDQNR3HWUDQRYLü Istorija Jugoslavije 1918-1978, (Beograd 1981), 150.
ýDOLü, 233-234. Throughout the interwar period, peasant could not lose to debt up to 2ha of land, pair of plowing
animals and a plow.
92
Ibid., 233.
93
Ibid., 236-237.
94
Ibid., 236.
91
36
only 1.3% had secondary education, and a miniscule 0.15% with university degree.95 This lack
of educated workforce was particularly emphasized and visible in the machine industry, but
other sectors suffered as well.96 Although predominantly a consequence of the inadequate
educational system which was unable to respond to the needs of industry, there were other
causes as well, notably demographic.
The Kingdom of Yugoslavia had the highest birth rate in Europe. 97 Consequently, the
system was overburdened with students in primary and secondary schools, rendering it
inefficient, while the high death rate, especially among youth, meant that a lot of investments in
education went to waste. At the same time, the low life expectancy, as another demographic
factor, caused the fast flow of workers in the labor market and shortened the period in which
they could get extra education or special skills.98 Great differences in regional development
DGGLWLRQDOO\ FRPSOLFDWHG WKH VLWXDWLRQ ZKLFK LQ FRPELQDWLRQ ZLWK ZRUNHUV¶ UHWHQWLRQ RI WLHV
with the countryside hampered their interregional migration. Those workers who were
considered as skilled in undeveloped areas could be compared to ordinary workers in more
developed regions, leaving them with few options for further education or specialization. As a
consequence, factories and craft workshops had no other choice than to take the responsibility
of educating the workers themselves.99 This was also one of the reasons why a few of the
modern industrial facilities in the country found it cheaper and less time consuming to employ
skilled workers from abroad who eventually became the core of the skilled workers pool in the
country.100 However, even though this soothed the extreme deficiency of qualified workers in
95
3OHãWLQD
ýDOLü, 280-281.
97
Ibid., 222. Even though the birth rate experienced sharp decline between 1918 and 1941, with average growth of
population of 15 per thousand in 1940 it was still the highest in Europe.
98
Ibid., 281-282.
99
Ibid., 285.
100
Ibid., 239; 290-291.
96
37
the country, the measure was palliative. According to official estimates, more than 25,000
foreign technicians and expert workers were employed in the Yugoslav industrial enterprises,
EXW³WKH\GLGQRWSXWDQ\HIIRUWLQWRHGXFDWLQJGRPHVWLFFDGUHV´QHLWKHURUGLQDU\ZRUNHUVQRU
technicians and managers.101 In this kind of environment it was not surprising that those
XQTXDOLILHG ZRUNHUV ZKR KDG WKH GHVLUH WR H[SDQG WKHLU NQRZOHGJH ZHUH IRUFHG WR ³VWHDO WKH
FUDIWZLWKWKHLUH\HV´VLQFHIRUHLJQRUGRPHVWLFWHFKQLFLDQVDQGH[SHUWZRUNHUVZHUHH[WUHPHO\
reluctant to share their knowledge, primarily out of fear of competition.102
The average Yugoslav worker in the interwar period still had not developed the
practices and ethics essential to industrial work. Changing jobs in factories up to four or five
times a season, and keeping the peasant way of life and thinking, created an environment in
ZKLFKZRUNHUVZHUHUHOXFWDQWWRDGDSWWRWKHPDFKLQHU\¶VZRUNLQJF\FOHWKH\UDWKHULQWURGXFHG
into factories a slow working rhythm and a certain contempt of time, norms and working
schedules.103 5HIHUULQJWR:HEHU¶VGHILQLWLRQRI³HFRQRPLFWUDGLWLRQDOLVP´104, it can be argued
that with this kind of pre-industrial work ethic in combination with the law-protected rural
estate, the average Yugoslav worker was considering his job in the factory more as an
additional source of income, rather than his vocation ( Beruf).
And they needed additional income. According to the official analysis, the average
ZRUNHU¶VVDODU\LQZDVRQO\RQHTXDUWHURYHUWKHH[LVWHQWLDOPLQLPXPIRURQHSHUVRQ7KLV
meant that a four-member family with two average salaries was barely able to cover its basic
needs in food, clothing and housing, while at the same time at least one fifth of the workers
101
Arhiv Jugoslavije, collection *HQHUDOQL NRPHVDULMDW MXJRVORYHQVNH VHNFLMH RSãWH PHÿXQDURGQH L]ORåEH X
Briselu 1958 [General Commissariat of Yugoslav Section in the Universal International Exhibition, Brussels 1958]
, archival unit 8 (in further reference AJ, 56, 8). Pripremni odbor za oblast Privreda [Preparatory Board for the
Economy Sector], December 1956.
102
ýDOLü, 285.
103
Ibid., 291-293.
104
Max Weber, The Protestant Ethic & The Spirit of Capitalism (Los Angeles: Roxbury Publishing Company,
2002), 22-23.
38
received salaries four to five times lower than the statistical average. 105 As a consequence, the
majority of workers could not afford to rent even the lowest quality housing and were forced to
live in peripheral parts of industrial towns and cities, usually in hovel-house communities,
without running water or electricity.106
Considering all that has been said about the process of the development of the workers
in the interwar Yugoslavia, the statement may be hazarded that no class identity actually
H[LVWHG H[FHSW LQ VRPH ³SRFNHWV´ RI UHODWLYHO\ PRGHUQ LQGXVWULDO IDFLOLWLHV DQG WKRVH Zhere
foreign workers were employed. Low-VNLOOHGDQGSRRUO\ HGXFDWHGWKLV³LQGXVWULDOSHDVDQWU\´
seems to be a highly diverse group of people in the beginning of the process of becoming urban
industrial workforce, possibly only unified by a general resentment of factory life and by their
need to find additional sources of income, whether working in agriculture or in some other
extra jobs during or outside regular working hours, possibly even resorting to petty criminal
activities.
$:RUNHUV¶2DVLV7KH Military-Technical Institute in Kragujevac
The situatLRQ LQ WKH 9RMQRWHKQLþNL ]DYRG >7KH 0LOLWDU\-Technical Institute] in
Kragujevac was different than in the rest of the country. Established as a cannon foundry and
armament repair shop in 1848, it was gradually evolving to become one of most modern
industrial facilities in Serbia. During the interwar period this factory experienced fast
development and its output rose by a factor of 17; by the time the Second World War started,
this was the biggest industrial enterprise in the country with more than 12,000 employees, in
105
0DUNR 0LOMNRYLü 6SROMQRSROLWLþNL NRQWHNVW UD]YRMD DXWRPRELOL]PD X %HRJUDGX -1939 [Foreign Policy
Context of the Development of Automobilism in Belgrade, 1937-1939] (Belgrade: Faculty of Philosophy, History
Department, MA Thesis Collection, 2011), 114.
106
0LOMNRYLü6SROMQRSROLWLþNLNRQWHNVWUD]YRMDDXWRPRELOL]PDX%HRJUDGX -1939, 114-115.
39
the town of around 35,000 inhabitants, and the leading factory in the network of five other
Yugoslav similar military facilities. The Institute also had from 1854 its specialized school for
crafts and skills necessary in the military industry.107 This school was considered as one of the
most advanced technical schooling facility in the interwar Yugoslavia, where the students were
funded by the state, with adequate stipend, accommodation, free books and other benefits,
among them a shorter conscription period. By 1940 almost 2,000 students had graduated from
this school, most of them being employed at the Institute.108
7KHVH VWXGHQWV ZHUH D VRUW RI ORFDO ZRUNHUV¶ HOLWH KDYLQJ WKHLU RZQ FOXE PDJD]LQH
library, sport section, and even theatre. This was all part of the state project of separating the
³VWDWHFUDIWVPHQ´ZKLFKZDVWKHLURIILFLDOWLWOHIURPLQWHUDFWLRQZLWKWKHUHVWRIWKHZRUNHUV
ostensibly making them less susceptible to the Communist Party propaganda. Furthermore,
being a military fDFWRU\DQ\NLQGRISROLWLFDOHQJDJHPHQWRIWKHVH³VWDWHFUDIWVPHQ´ZDVLQDQ\
case strictly forbidden.109 Unskilled workers did not enjoy these kinds of benefits, and most of
them were working in poor hygienic conditions in a highly toxic environment with almost no
protective equipment.110 These conditions were excellent breeding ground for the work of the
Communist Party, which was illegal in Yugoslavia throughout the interwar period.
.UDJXMHYDF ZDV D FUDGOH RI WKH 6HUELDQ DQG <XJRVODY VRFLDOLVW ZRUNHUV¶ PRYHment.
$OUHDG\ RQ )HEUXDU\ OHG E\ 6YHWR]DU 0DUNRYLü WKH ILUVW VRFLDOLVW OHDGHU LQ 6HUELD
KXJH ZRUNHUV¶ GHPRQVWUDWLRQV ZHUH RUJDQL]HG NQRZQ LQ KLVWRU\ DV 5HG %DQQHU
107
'UDJROMXE % 0LODQRYLü =DYRGL µ&UYHQD =DVWDYD¶ X .UDJXMHYFX [The Red Flag Institute in Kragujevac]
(Kragujevac 1967), 4-5. In 1849, foundry became the owner of the first steam engine in Serbia; in 1851 it was
relocated from Belgrade to Kragujevac (central Serbia) due to fear of attack by Austrian Empire; in the beginning
LW ZDV VLPSO\ NQRZQ DV ³7RSROLYQLFD´ >&DQQRQ )RXQGU\@ DQG LQ LW ZDV UHQDPHG WR ³0LOLWDU\-Technical
,QVWLWXWH´=HþHYLü O posleratnoj obnovi vojne industrije i izgradnji automobilske proizvodnje , 13; ýDOLü, 391.
108
Od topa do automobila, 1853-1973, .UDJXMHYDF=DYRGLÄ&UYHQD=DVWDYD³ 1973 [From Cannon to Automobile,
1953-1973], 39-40. These numbers stand for the interwar period only.
109
Ibid., 40.
110
Ibid., 40.
40
demonstrations, which after the Second World War became the name of the whole factory in
Kragujevac (Red Flag)111. The red banner was raised by one gunsmith who won the local
HOHFWLRQV DQG ZDV GHPDQGLQJ ZRUNHUV¶ VHOI-management. In the interwar period, after the
elections of 1926, local communists created a short-lived Red Municipality, and were also
active in organizing general strikes and other covert work, especially after 1929 when the local
Communist Party cell was created.112 While this story is at least to a certain extent a
romanticized during communist rule, it nonetheless captures some of the important directions
of the evolution of the working class consciousness among the ordinary Institute workers.
All this meant that during the interwar period a sharp division between highly skilled
craftsmen on one side, and ordinary workers on the other was created by official state practices.
This division was further emphasized and fueled by an ideological division which was
gradually evolving with the upcoming war. In order to keep the core of educated workers under
control and fully loyal to the factory, the state and official ideology, government and military
establishment provided them with sufficient means to maintain relatively high living standards,
especially compared to the general situation in the country. While the overlapping categories of
the workers necessarily existed, both on economic and ideological grounds, it is important to
notice how the educational gap eventually produced social and political divisions among the
workers in the Institute.
As a big industrial complex, the 9RMQRWHKQLþNL]DYRGZDVDOVRLQYROYHGLQFRQVWUXFWLRQ
RIKRXVLQJLQZRUNHU¶VFRORQLHVLQ.UDJXMHYDFZKLFKZHUHHUHFWHGLQWZRVXFFHVVLYHZDYHVLQ
111
7KHGLIIHUHQFHLQWHUPV³IODJ´DQG³EDQQHU´LVVWUHVVHGVLQFHLQWKHRULJLQDOQDPHVWKHWHUPVGLIIHUDVZHOOWKH
WHUP³EDQQHU´VKRXOGEHUHDGDVDPRUHDUFKDLFWHUP
112
JRGLQDUDGQLþNRJVDYHWD-1985 ><HDUVRI:RUNHUV¶&[email protected]=DYRGL&UYHQD=DVWDYD
:KLOHWKH ZRUG³6HOI-PDQDJHPHQW´ ZDV ZULWWHQRQWKHUHGEDQQHUDQGKRZHYHUWHPSWLQJLW PLJKWEHLW
should not be confused with the socialist self-management system created after the Second World War.
41
the late 1920s and late 1930s.113 The first colony housed around 500 families, and had a school,
kindergarten, ambulance, pharmacist, library, and other amenities of modern urban life; the
design was based on English experience in building similar colonies. 114 The importance of
these colonies should be observed from several aspects. First, the fact that the colony was
needed seems to suggest that there was a rising number of industrial workers who were living
LQ WKH WRZQ 6HFRQG OLYLQJ LQ D ZRUNHU¶V FRORQ\ FRXOG ERRVW WKH IHHOLQJ RI EHORQJLQJ WR D
certain community or even a class, with shared everyday rituals, thus influencing the creation
RIFRPPRQZRUNHU¶VLGHQWLW\+RZHYHULWFDQDOVREHDUJXHGWKDWWKHFRQFHQWUDWLRQRIZRUNHUV
in relatively cozy houses was also part of the state project aiming to fight the Communist
propaganda by allowing at least some benefits to unskilled industrial workers. In comparison,
the housing conditions in other parts of the country were in general appalling, and the poor
XUEDQZRUNHUVZHUHLQPRVWFDVHVOLYLQJLQWKHLUUDPVKDFNOHKRXVHVLQWKHRYHUFURZGHGFLWLHV¶
peripheral settlements, built by themselves and without any plans or supporting infrastructure
(see in chapter 2.2).
7KHUHIRUH ZKLOH WKH YHU\ EOHDN SLFWXUH SUHVHQWHG E\ ýDOLü LQ KHU GHVFULSWLRQ RI WKH
working class in Yugoslavia in the interwar period can be accepted as an overall situation, it
fails to capture the complete reality which is impossible to explain in one catchy term. It seems
that while in Kragujevac, and other bigger industrial towns, workers had far advanced in the
process of creating an urban industrial workeUV¶LGHQWLW\ZLWKWKHLUHQWLUHOLIHUHYROYLQJDURXQG
WKHIDFWRU\ZKHWKHUEHKLQGWKHPDFKLQHVRULQ ZRUNHU¶VFRORQ\ýDOLüLVULJKWWKDWRXWVLGHRI
WKHVHLQGXVWULDOFHQWHUVIDFWRU\ZRUNHUVZHUHQRWKLQJPRUHWKDQ³LQGXVWULDOL]HGSHDVDQWU\´,Q
any case, thHFUHDWLRQRIVRFLDOLVWZRUNHU¶VLGHQWLW\DIWHUWKHZDUXQDYRLGDEO\VWDUWHGZLWKWKLV
113
114
Od topa do automobila, 1853-1973, 44-45.
Ibid., 44.
42
highly heterogeneous group of workers whose identity (where it existed) seems to be more
connected to their own factory and local community, rather than to a single class as a whole. In
that sense, the creation of the socialist worker would be much more difficult in these
communities than in other parts of the country where such loyalty to the factory or local
community did not exist or at least was not that strong.
Furthermore, in a country where the almost entire banking system, heavy industry,
mines and the infrastructure was firmly under the control of the authoritarian regime,
additionally strengthened by the fears of upcoming war, the entire industrial sector and the
<XJRVODYLD¶V HFRQRP\ ZDV LQFUHDVLQJO\ FRPLQJ XQGHU WKH ILUP FRQWURO RI WKH <XJRVODY
military. In addition to that, judging from the analysis of the situation in the pre-war
9RMQRWHKQLþNL LQVWLWXW LQ .UDJXMHYDF WKH PLOLWDU\ VHFWRU ZDV SUREDEO\ WKH PRVW DGvanced
industrial branch in the country.
The importance of these conclusions about the state of the Yugoslav industry, the
mechanisms of its control and management, and the structure of the industrial workers, are
important to remember as one of the aspect of the Yugoslav post-war development and
especially in the period after the Tito-Stalin split of 1948 when the imminent danger of the
Soviet intervention produced similar environment in which Yugoslav industrialization was
pursued as a vital goal and preFRQGLWLRQRIWKHFRXQWU\¶VLQGHSHQGHQFH
43
,,,7KH³*UHDW´&KDQJH$XWRPRELOH,QGXVWU\LQWKH3RVW-W ar
Development, 1945-1962
³7KH GLDJUDP RI GHVWUR\HG LQGXVWU\ ODFN RI ZRUNHUV WHFKQLFDO H[SHUWV DV ZHOO DV
material deficiencies in 1945 without any GRXEWSOXPPHWHGZD\EH\RQG]HUR´115 Even though
this evaluation of the overall situation in Yugoslavia immediately after the Second World War
seems to be excessive, it nonetheless captures the general picture of the war destroyed country.
According to the official estimates, Yugoslavia lost 10.8% of its total prewar population with
direct material destruction in absolute numbers reaching a level of 1.4 times higher than in
Great Britain, two times higher than in Netherlands and 7.2 times higher than in the United
States of America.116 Direct damage of Yugoslav industrial facilities was assessed at 36.5% of
the entire pre-war value.117
$IWHU WKH &RPPXQLVW 3DUW\ WRRN SRZHU LQ <XJRVODYLD LQ ³>W@KHIRUPDWLRQ RI
socialist-owned property was considered to be the most significant act in the policy of building
VRFLDOLVP´ LQ WKH FRXQWU\118 $V %LüDQLü DUJXHV VRPH ³H[DJJHUDWLRQV DQG XQQHFHVVDU\
YLFWLPL]DWLRQ´LQWKLVSURFHVVZHUHLQHYLWDEOHFRQVLGHULQJWKHUHYROXWLRQDU\]HDODQGHPRWLRQDO
reaction of the workers who in any case were the winners of the social revolution.119 However,
the whole process of the property transfer from private and capitalistic to the socialist-state
ownership was made easier by the fact that state was already controlling the largest banks, the
complete infrastructure, the heavy industry complexes and the military industry. Property of
115
AJ, 56, 8. Pripremni odbor za oblast Privreda [Preparatory Board for the Economy Sector], December 1956.
Jugoslavija 1918- 6WDWLVWLþNL JRGLãQMDN [Yugoslavia 1918-1989. Statistical Yearbook] (Beograd 1989),
191-192.
117
,YDQD 'REULYRMHYLü ³¶6YL X IDEULNH¶ ,QVWDQW LQGXVWULMDOL]DFLMD X -XJRVODYLML -´ >(YHU\ERG\ LQWR WKH
Factories! Instant Industrialization in Yugoslavia 1945-1955], Istorija 20. veka , no. 2 (2009), 104.
118
%LüDQLü
119
%LüDQLü
116
44
collaborators was also easily nationalized, and the same is true for the property which the
enemy had already expropriated from the previous owners, particularly Jews. Small craftsmen
were left in private sector, agriculture was reformed but mass nationalization proved to be a
failure and was quickly abandoned. Residential apartments were nationalized only in 1959,
together with tourist center facilities.120
While tKLVNLQGRIVLWXDWLRQKHOSHGWKHHVWDEOLVKPHQWRIWKH<XJRVODY&RPPXQLVWV¶UXOH
it also had its drawbacks since while formally becoming part of the state-socialist sector, these
companies were slow to transform internally, therefore only very slowly becomLQJ ³WUXO\
VRFLDOLVW´ )XUWKHUPRUH VLQFH WKH 7LWR-Stalin split raised a fear of the Soviet military
intervention, the Yugoslav Army (YA) extended its control over the industry throughout the
period analyzed in this chapter, deep into the 1950s.
The Yugoslav automobile and motor industry was still a new and underdeveloped
industrial branch.121 The Army-controlled factory Industrija motora Rakovica (IMR) near
Belgrade (Serbia), started in 1939 the assembly of trucks on a license agreement with the
Czechoslovak manufacturer Praga; after the war attempts were made to reestablish this
program.122 The other important factory was Tovarna Avtomobilov Maribor (TAM) in
Slovenia. This was one of the most modern industrial facilities in the country, built in 1942 by
the Germans for production of airplane components, including for the jet-engines. After the
war, this program was abandoned, and by 1946 the new Yugoslav government decided that it
should join the forces with the IMR in the project of mastering the truck production.123
120
%LüDQLü-25.
,ZLOOXVHWKHWHUP³DXWRPRELOH´LQZLGHUPHDQLQJZKLFKLQFOXGHVPRWRUYHKLFOHVRIYDULRXVW\SHVDQGZKHUH
QHFHVVDU\WHUPV³SDVVHQJHU DXWRPRELOH´³WUXFN´RU³WUDFWRU´ZLOOEHXVHG
122
'HQGD³9RMQLIDNWRULL]JUDGQMDIDEULNHDXWRPRELODX.UDOMHYLQL-XJRVODYLML´-24.
123
AJ, 108 GDSIM 32-&UWHåLPOD]QRJPRWRUD>7KH-HW(QJLQH%OXHSULQWV@1RYHPEHU Milena
7UãLü XU Tovarna avtomobilov in motorjev Maribor, 1947-1987 [Automobile and Motor Factory-Maribor]
(Maribor: Tovarna avtomobilov in Motorjev, 1987), 1-4.
121
45
3.1 Sovietization of the Yugoslav Automobile Industry, 1944-1948
The first couple of years after the Second World War in Yugoslavia were characterized
by rapid Sovietization of the state and society. Almost religious loyalty to the Soviet model was
perceived by the American ambassador in Belgrade who described Yugoslav president Tito as
³WKHPRVWGRJPDWLFDQGPRVWPLOLWDQW6WDOLQLVWLQDOORI(XURSH´DQGWRZKRP%HOJUDGH³ORRNHG
OLNHWKHFDSLWDORIVRPH6RYLHWUHSXEOLF´124 On a more practical level, Yugoslavia was the first
DPRQJ(DVW(XURSHDQFRXQWULHVWRLQWURGXFHDQ³H[FHVVLYHO\ULJLG´6RYLHW-type Five-Year Plan
RILQGXVWULDOGHYHORSPHQWZKLFKZDV³GLYLGHGLQWR\HDUO\TXDUWHUO\WHQGD\DQGHYHQ
GDLO\SODQV´IRUHDFKFRPSDQ\LQWKHFRXQWU\thus directly controlling production of more than
13,000 commodities, adding up to total weight of a full ton and a half in paper. 125 However,
cracks in the monolith relationship between Tito and Stalin were recognized by foreign
observers already in 1947, which eventually evolved into a complete split between the two
leaders in 1948.126 All of this had a profound effect on the development of the Yugoslav
automobile industry.
The Sovietization of the industry in East European countries was executed through the
system of the Soviet expert-advisors who controlled the implementation of the Soviet model of
industrialization and were making the most important decisions in their sector or factories they
were assigned to.127 7KHFUHDWLRQRID6RYLHW³SHUPDQHQWDGYLVRU\V\VWHP´LQ³KRVW´FRXQWULHV
as an important part of the process of Sovietization of the Eastern and Central Europe, truly
124
5DGLQD9XþHWLü Koka ±kola socijaliza m [Coca-&ROD6RFLDOLVP@%HOJUDGH6OXåEHQLJODVQLN-50.
Berend, 3OHãWLQD0DUWLQ6FKUHQN&\UXV$UGDODQ1DZD$(O7DWDZD\ Yugoslavia: Self-Management
Socialism and the Challenges of Development (Baltimore and London: The John Hopkins University Press, 1979),
23.
126
9XþHWLü, 50.
127
3iO*HUPXVND³,QDState of Technological Subjection: Soviet Advisers in the Hungarian Military Industry in
WKH V´ LQ Expert Cultures in Central Eastern Europe. The Internationalization of Knowledge and the
Transformatioon of Nation States since World War I , Martin Kohlrauch, Katrin Steffen and Stefan Wiederkehr
(eds.) (Osnabrück: Fibre Verlag, 2010), 202-203.
125
46
accelerated only after 1949 and the creation of the Council for Mutual Economic Assistance
(COMECON), even though some brief and instant expert assistance was provided in 1944 and
1945, though predominantly for establishing local secret police and for servicing the advancing
Red Army.128
,Q WKH FLYLO VHFWRU WKLV NLQG RI ³DVVLVWDQFH´ ZDV DFFRPSDQLHG E\ WKH ³FRPSXOVRU\
acceptance of the SoYLHW WHFKQRORJ\ DQG SURGXFWLRQ PRGHO´ HYHQ LQ FDVHV ZKHUH IRU VRPH
branches of industry it meant a step back in their development. 129 9DOHQWLQD)DYD¶VDQDO\VLVRI
the impact of the process of Sovietization on the development of the Czechoslovak automobile
industry is an excellent case study of devolution of previously advanced industrial branch. 130 At
WKHVDPHWLPHZKLOHWHUPV³DGYLVRU´DQG³LQYLWDWLRQ´VHHPPRUHOLNHHXSKHPLVPVDQG6RYLHW
propaganda, the fact remains that except for Soviet experts nobody actually knew how to
organize a centrally planned economy, even though the exaggerated belief in their capabilities
was present as well.131
However, Yugoslavia was a proverbial exemption to this rule. Focusing only on the
process of the development of the automobile and motor industry, and using data obtained from
the archival material, it seems that right from the start Soviet experts were basically in charge
of the industrial development of Yugoslavia. The Soviet expert-HQJLQHHU0LUþD.DGDUMDQZDV
formally invited in 1945 by the Central Committee of the League of Communist of Yugoslavia
(LCY) to take the leading position in the project of developing Yugoslav national motor
128
Germuska, 202.
Ibid., 200.
130
9DOHQWLQD)DYD³%HWZHHQ$PHULFDQ)RUGLVPDQG
6RYLHW)RUGLVP
´, 47-64. Fava argues that the introduction of
the Soviet model of automobile production brought Czechoslovak automobile industry which in the late 1940s had
realistic chances to become one of the leaders in Europe, almost to a complete collapse, and that by losing almost a
full decade in this model switch, the recovery whLFKFDPHLQWKHHDUO\VKDGDOOWKHFRPSRQHQWVRIWKHÄWRR
OLWWOHWRRODWH³VFHQDULR
131
Germuska., 203-204.
129
47
industry.132 At least since the first half of 1946 he was employed as an Executive Director of
the Plan in the Main Directorate of the Federal Motor Industry. 133 Kadarjan was also involved
in the 1946 negotiations for continuation of the license agreement for truck production with the
Czechoslovak manufacturer Praga, and at least on one occasion hHZDVLQYROYHGLQ³FODULI\LQJ
WHFKQLFDO LVVXHV´ ZLWK RQH EXVLQHVV SDUWQHU LQ +XQJDU\134 From this position he was in full
control of the development of the automobile industry in Yugoslavia, but due to the specific
characteristics of this industrial sector, his decisions and plans had great impact on the whole
process of industrialization.
This principle was even more visible in the sector of military cooperation where Soviet
experts were constantly present in the country, while at the same time, Yugoslav military
FDGUHVZHUHHGXFDWHG³H[FOXVLYHO\XQGHUWKH6RYLHWLQIOXHQFH´135 The Soviet model was copied
WRWKHOHWWHUULJKWGRZQWRWKH$OLMD6LURWDQRYLü¶V³PRYHPHQWIRUKLJKZRUNSURGXFWLYLW\´DQG
the shock-work competition system which was a complete copy of the Soviet Stakhanovite
movement.136 &RPSDULQJDOORIWKHVHLQIRUPDWLRQZLWKWKH*HUPXVND¶VUHVXOWVLWFDQEHDUJXHG
that Yugoslavia was not only the exception but eventually turned out to be the specific training
ground for the process of Sovietization which after 1949 was actively pursued in the rest of
Central and East European countries, even though that it is highly unlikely that this kind of
scenario was ever planned by the Soviet side.
132
AJ, 108 GDSIM, 1-5/1071). Official complaint of the director of the Main Directorate of the Federal Motor
Industry to the Executive Board of WKH 3HRSOH
V &RXQFLO LQ %HOJUDGH 0DUFK 0LUþD .DGDUMDQ ZDV
Yugoslav engineer and émigré who for 15 years actively participated in the development of the automobile
industry in the Soviet Union.
133
AJ, 108 GDSIM, 30-52/786 The Plan of the Development of Yugoslav Motor Industry, March 19, 1947; AJ,
108, 3-11/11 License agreement with the Czechoslovak manufacturer Praga for the production of trucks in
Yugoslavia, March 3, 1949.
134
AJ, 108, GDSIM, 3-11/8. License agreement for trucks Praga RN, March 2, 1949; AJ, 108 GDSIM, 4-17/183
3DVVSRUWVIRU0LUþD.DGDUMDQDQG0LOMDQGåLü1LNROD$XJXVW
135
9XþHWLü
136
AJ, 108 GDSIM, 1-5. Counsel for the Higher Productivity in Motor Industry, September 12, 1949.
48
The story about Yugoslav attempts to establish the production of tractors based on the
license agreement with one of the Soviet factories reveals how cooperation between the two
countries in terms of technical and expert support actually functioned. Yugoslav officials
UHFRJQL]HGWKH³EXUQLQJGHPDQGIRUWUDFWRUV´LQWKH country and in 1946 they tried to negotiate
a license agreement with one Hungarian manufacturer. Yet these plans were soon shelved since
WKH6RYLHWVLGHVKRZHG³H[WUHPHO\JRRGZLOO´WRRIIHUWKHLURZQOLFHQVH 137 However, the price
IRU WKH ³H[WUHPHO\ JRRG ZLOO´ ZDV YHU\ GHDU 'XULQJ VHYHUDO URXQGV RI QHJRWLDWLRQV KHOG LQ
Moscow during 1947 the Soviet side conditioned their final approval with the signing of a
contract of technical cooperation between the Yugoslav and the Soviet government. 138 Reading
between the lines, this meant that by signing this agreement on the highest possible level
Yugoslavia would put the majority of the program of its industrialization and technical
development in general under direct Soviet control.
At the same time, the representatives of the Yugoslav Army (YA) were supporting this
SURMHFWLQVLVWLQJWREXLOGLQ<XJRVODYLDWKHPRVWDFFXUDWHFRS\RI6WDOLQJUDG¶VWUDFWRUIDFWRU\
right down to the idea that it should be able to produce tanks in case of a war. Furthermore,
even though the location for this factory was initially planned to be near Belgrade, where
VHYHUDO RWKHU PDFKLQH LQGXVWU\ IDFWRULHV DQG QHFHVVDU\ LQIUDVWUXFWXUH DOUHDG\ H[LVWHG ³GXH WR
WKHUHDVRQVRIDVWUDWHJLFQDWXUH´WKH<$ZDQWHGWKLVIDFWRU\DVFORVHDVSRVVLEOH to the border
with Romania, or in other words, in the very eastern part of the country. 139 Regarding what has
VR IDUEHHQVDLG DERXW WKHQDWXUHRIWKLVNLQG RIWHFKQLFDO DVVLVWDQFH<XJRVODY JRYHUQPHQW¶V
137
AJ, 108 GDSIM, 28-43/448. Pro Memorium SUREOHPDWLNHSURL]YRGQMHWUDNWRUDXQDãRM]HPOMLQDED]LQDEDYNH
inostrane licence [ Pro Memorium of Problems in the Tractor Production in Our Country on the Basis of
Acquirement of the Foreign License], January 20, 1949.
138
AJ, 108 GDSIM, 28-43/446. Analiza investicionog sporazuma sa SSSR-om [The Analysis of the Investment
Agreement with the USSR], February 12, 1948.
139
AJ, 108 GDSIM, 30-'DQD *'DU\PSOH ³7KH$PHULFDQ7UDFWRU&RPHVWR 6RYLHW$JULFXOWXUH7KH
7UDQVIHURID7HFKQRORJ\´ Technology and Culture 5, no. 2 (Spring, 1964): 191-214.
49
denial to accept these terms, followed by the immediate breakdown of negotiations in
November 1947, shows that while trying to copy Soviet Union almost in everything, and in
VSLWH RI WKH <$¶V REYLRXV DOLJQPHQW ZLWK WKH 6RYLHW VLGH WKH <XJRVODY JRYHUQPHQW ZDV QRW
willing to completely delegate its independence to the great ally.
Foreign expert workers, who were en masse employed in Yugoslav factories, were
another important factor which characterized and at the same time shaped the process of
industrialization in Yugoslavia in the period immediately after the Second World War. These
were predominantly German and Italian workers. A substantial number of them were not war
prisoners, but legally hired labor, whose services were acquired through Yugoslav War
Reparation Committee in Berlin.140 According to archival material of the Main Directorate of
the Federal Motor Industry, their number changed on monthly basis, but the fact remains that in
the Yugoslav TAM truck factory in 1949 there were still 50 German engineers and technicians,
some of which had been working there since mid 1946; and the situation was similar in other
motor industry factories.141 In the entire Yugoslav Ministry of Heavy Industry until the end of
1948, exactly 61,472 German and Austrian workers, technicians and engineers, both as hired
labor and as war prisoners were engaged in various factories all over the country.142
These workers presented the most educated and the most experienced experts in their
sectors, and were also working in important and even executive positions within the factories.
Furthermore, in some of the factories foreign workers created the majority of the workforce,
140
$- FROOHFWLRQ 0LQLVWDUVWYR WHãNH LQGXVWULMH YODGH )15- >0LQLVWU\ RI +HDY\ ,QGXVWU\ RI WKH )35<
Government], file 23, archival unit 28 (in further reference AJ, 16 MTI, 23-28). Procedure for the engagement of
the war prisoners, April 20, 1948.
141
AJ, 108 GDSIM, 4-16/532. List of foreign engineers and technicians in TAM (Tovarna automobilov MariborTezno), 1949. Information of the foreign experts employed in the Yugoslav motor industry is spread throughout
this collection.
142
AJ, 16 MTI, 23-28. Plan for the repatriation of the war prisoners, December 1948.
50
VLQFH <XJRVODY ZRUNHUV ZHUH ³VWLOO NHSW LQ WKH $UP\´143 Yugoslav officials in Germany in
1947 even established contacts and started negotiations with Ferdinand Porsche and his closest
circle of associates about their assistance in the project of development of automobile industry
LQ <XJRVODYLD <HW WKH QHJRWLDWLRQV VRRQ FROODSVHG VLQFH 3RUVFKH¶V WHDP GLG QRW UHFHLYH D
proper offer for months after the initial contact was established.144 3RUVFKH¶V³SHRSOH¶VFDU´ZDV
of great interest for the Yugoslav state officials, and where officials failed, Yugoslav students
made significant progress. IntereVWLQJO\HQRXJK0RPLU=HþHYLüZKRLQEHFDPHWKHILUVW
director of the new Crvena Zastava passenger automobile factory, received his practical
education as a young student in the Volkswagen factory in 1952.145
However, it has to be said that this was a general trend in the first couple of years after
the war, when Allied countries were in a race for German military and civilian experts and
engineers.146 While this was an obvious necessity in a country that did not have enough
engineers and expert workers for the ambitious plans of fast industrialization, which was
general remark in the monthly reports of workforce fluctuation in the factories of motor
LQGXVWU\LWDOVRVKRZV<XJRVODYLD¶VUHODWLYHO\LQGHSHQGHQWSRVLWLRQLQWKHUHODWLRQVKLSZLWKWKH
USSR. Even before 1948, Yugoslavia was negotiating technical assistance contracts and hiring
expert workforce where they were readily available and not necessarily where it would have
EHHQ SROLWLFDOO\ SURILWDEOH 7KH PHPRULHV RI 0RPLU =HþHYLü ZKR DW WKDW WLPH ZRUked as a
technician in one factory of agricultural machinery, confirm that except for one Soviet
143
=HþHYLü
AJ, 108 GDSIM, 17-31/254. Confidential report about negotiations with engineers Porsche and Dykhoff,
September 15, 1947.
145
=HþHYLü
146
&KULVWRSK0LFN³6HUYLQJ7ZR'LFWDWRUV*HUPDQ6FLHQWLVWVLQWKH6RYLHW8QLRQDIWHU:RUOG:DU,,´LQ Expert
Cultures in Central Eastern Europe. The Internationalization of Knowledge and the Transformatioon of Nation
States since World War I , Martin Kohlrauch, Katrin Steffen and Stefan Wiederkehr (eds.) (Osnabrück: Fibre
Verlag, 2010), 181-198. Mick gives detailed analysis of the motives and mechanisms of justification among the
German experts who openly cooperated both with Nazi and Soviet regime.
144
51
engineer, who was in charge of the construction bureau of the factory, the great majority of
engineers and technicians in the bureau were German war prisoners, and the proportion was
PRUH RU OHVV WKH VDPH ZLWK UHJXODU ZRUNHUV LQ IDFWRU\¶V VKRS-floor.147 His recollections also
confirm that Soviet expert technicians were predominantly employed in different ministries and
their specialized offices.148
The Tito-Stalin split of 1948 was a turning point in the development of the socialist
Yugoslavia, but for Yugoslav policies of industrialization the change was not that dramatic, at
least not in the first couple of years. The Soviet-type shock-work model, known in Yugoslavia
DV ³$OLMD 6LURWDQRYLü¶V PRYHPHQW´ ZDV LQWURGXFHG LQ RUGHU WR RYHUFRPH WKH REVWDFOHV LQ
EXLOGLQJ RI VRFLDOLVP FUHDWHG E\ ³FDOXPQLDWRUV WKH 8665 DQG FRXQWULHV RI SHRSOH¶V
GHPRFUDF\´EXWDVZHOOWKRVHRIWKH³LPSHULDOLVWLFFRXQWULHV´ 149 However, by the end of 1948,
6RYLHW H[SHUW 0LUþD .DGDUMDQ ZDV NLFNHG RXW RI WKH FRPPXQDO DSDUWPHQW KH ZDV JLYHQ LQ
Belgrade, he was publicly accused of being a drunkard and a slacker, his Medal of Work was
annulled, and his place was taken by another Yugoslav expert émigré, -RåH0HQWRQ7KHRQO\
difference was that he was coming from the USA and that instead of the communal apartment
KH PRYHG LQWR D ³VSHFLDOO\ EXLOW KRXVH´ DFFRUGLQJ WR ³WKH OLIH VWDQGDUGV KH ZDV DFFXVWRPHG
WR´150
This was only one of the many signals of the changing climate, but the process of de6RYLHWL]DWLRQZDVDVSDLQIXODVLWZDVVORZ7KHLPSOHPHQWDWLRQRIWKHVRFLDOLVW³RUJDQL]DWLRQDO
VNHOHWRQ´LQWKHIDFWRULHVEDVHGRQSULQFLSOHVDQG³GHPDQGVRIDVRFLDOLVWSODQQHGHFRQRP\´
147
=HþHYLü, 15.
Ibid., 17. These recollections are related to the period between 1946 and 1947.
149
AJ, 108 GDSIM, 1-5. Counsel for the Higher Productivity in Motor Industry, September 12, 1949.
150
AJ, 108 GDSIM, 1-5/1064 Confidential report of the director of the Main Directorate of the Federal Motor
Industry to the Minister of Heavy Industry, September 16, 1949; AJ, 108, 2-10/872. Awarding Medals of Work,
February 19, 1949; Kadajran was eventually rehabilitated in the early 1950s, and continued to work in Yugoslav
truck factories, however, he was downgraded to the level of simple factory engineer, and was moved from factory
to factory several times.
148
52
was only starting to be imSOHPHQWHG LQ HDUO\ DLPLQJ WR ³OLTXLGDWH WKH UHPDLQLQJ
RUJDQL]DWLRQDOIRUPVRIFDSLWDOLVWLFFRPSDQLHV´ZKLFKDWWKDWSRLQWZHUH³VWLOOQXPHURXV´151 It
ZDVDOVRDFNQRZOHGJHGWKDW³LQWKHLPSOHPHQWDWLRQRIWKLVRUJDQL]DWLRQQRWHYHU\WKLQJZHQWDV
it shoulGKDYH´DQGWKDWWKHWUDQVIRUPDWLRQRIWKHIRUPHUFDSLWDOLVWLFFRPSDQLHVUHPDLQHGRQO\
superficial.152 7KH UHDVRQ ZDV IRXQG LQ WKH IDFW WKDW ³PDQ\ LQGLYLGXDOV >«@ GR QRW REVHUYH
enough the essential difference between one capitalist and one socialist manufacturing
FRPSDQ\´153 It was also recognized that the TAM truck factory, the biggest in the Yugoslav
DXWRPRELOHLQGXVWU\ZDVLQPLGVWLOOIXQFWLRQLQJXQGHU³ROGRUJDQL]DWLRQDOIRUPVZKLFK
ZHUHLQWURGXFHGDWWKHWLPHRILWVHVWDEOLVKPHQW´%XWWKHPRVWLQteresting was that the official
decision was to leave it to function in the same way until all the smaller factories made their
WUDQVLWLRQWRVRFLDOLVWPRGHORIRUJDQL]DWLRQLQRUGHUWRPDNH³PLQLPDOGLVWXUEDQFHVGXULQJWKH
transition from the old to the nHZRUJDQL]DWLRQ´154
2Q WKH IDFWRULHV¶ VKRS-floor level this kind of environment created formidable
problems.155 While the overall pre-war level of expertise of the workforce was necessarily
degraded as a consequence of the devastating effects of the war where the majority of victims
were among the working-age population, the blitzkrieg Sovietization followed by slow process
of de-Sovietization, could not have helped much in the process of creating a socialist society.
The German and Italian workers were hired as a labor force and not necessarily as educators,
and Yugoslav workers could not benefit from their experience as well. In one of the reports
about the performance of German experts in the IMR factory it is stated that all of them were
151
AJ, 108 GDSIM, 2-6/71-73. Organizaciona problematika [Organizational Problems], December 13, 1948.
Ibid.
153
Ibid.
154
AJ, 108 GDSIM, 2-6/81. Classified report about problems in implementation of new organization of
production, June 23, 1949.
155
The following paragraph was based on series of reports about the problem of engaging peasant workforce in the
factories of automobile industry AJ, 108 GDSIM, 4/49-73, January-July 1950.
152
53
communicating exclusively among themselves and were accommodated in Belgrade hotels, or
RWKHU KRXVLQJ IDFLOLWLHV DZD\ IURP WKH <XJRVODY ZRUNHUV¶ FRORQ\ ZKLOH WKH ZDU SULVRQHUV
UHWXUQHGGLUHFWO\WRWKHLUSULVRQHUV¶FDPSVDIWHUWKHZRUN156 Thus, without proper experience
and with almost no chance of acquiring it form the foreign workers, in combination with
LQDGHTXDWHKRXVLQJIDFLOLWLHVORZTXDOLW\IRRGLQIDFWRULHV¶FDIHWHULDVDQGORZVDODULHVLWLVQRW
surprising that great percentage of the unqualified labor simply wanted to get back to villages
in order to work in the fields. These workers were part of a vast seasonal working cycle which
fluctuated between the fields and factories, continuing the pre-war practices. The female
workforce was even more disenchanted with factory life, leaving the factories whenever they
pleased and choosing rather to tend to their children and house work. 157 This kind of attitude
among women was of no surprise since they were considered as low quality workforce, and
whenever the workforce surplus appeared, they were the first to get fired.158
Furthermore, according to official data, in the period 1945-1949, the number of workers
in the country rose by one and a half million, the majority of them coming from the
countryside, and usually without proper training or education.159 'REULYRMHYLüFRQILUPV WKHVH
numbers emphasizing that in 1949 almost one million workers were employed in the factories,
but less than 200,000 stayed permanently employed, as a consequence of high fluctuation of the
workers form the countryside to factories and vice versa.160 With only thin layer of Yugoslav
pre-war experts and engineers, and the majority of Yugoslav workers falling into official
FDWHJRU\ RI ³VHPL-TXDOLILHG´ DV DUFKLYDO GRFXPHQWV VXJJHVW LW VHHPV WKDW HYHQ LQ WKH
156
AJ, 108 GDSIM, 4-17/506-507. Report about the Movement of the Foreign Experts, July 25, 1947.
AJ, 108 GDSIM, 4/49-73. Percentage of the workers who did not want to sign a contract with the factory and
openly wanted to go back to the countryside, ranged between 2-5%. However, in these reports it is not stated how
many of the rest were working both in factories and in the fields.
158
'REULYRMHYLü³¶6YLXIDEULNH¶´
159
'XãDQ%LODQGåLü Kratak pregled razvoja sa moupravljanja u Jugoslaviji [Short Overview of the Development
of Self-0DQDJHPHQWLQ<XJRVODYLD@6SOLW0DUNVLVWLþNLFHQWDU
160
'REULYRMHYLü³¶6YLXIDEULNH¶´
157
54
beginning of the 1950s the workers in Yugoslavia were even farther from creating their own
identity and class consciousness then they were in the interwar period, leaving the LCY both
externally and internally pressured to find a way of legitimization of its own rule.
Thus, the short-lived Sovietization of Yugoslav industry before 1949 did not penetrate
into much deeper organizational levels and probably did not progress much further than
transformation from private to state ownership, which in its own right was not difficult, and
especially in the machine industry where almost all factories in the interwar period already
belonged to the state, foreign or Jewish owners. Even those socialist organizational
mechanisms which were introduced, such as Stakhanovite-6LURWDQRYLü PRYHPHQW EDFNILUHG
and produced opposite results, at least in the initial phase of their implementation. In spite of all
propaganda about promoting a modern work rhythm, the whole Stakhanovite movement was
DFWXDOO\ FHPHQWLQJ ³WKH YHU\ µSHDVDQW¶ WDVN RULHQWDWLRQ WKDW WKH UHJLPH KDG GHQRXQFHG DV
EDFNZDUGQHVV´ E\ SXVKLQJ IRU KLJKHU QRUPV SURGXFWLYLW\ DQG IDFWRU\¶V RXWSXW161 By 1949
Yugoslavia was already a confirmed outcast of the Soviet bloc. Without proper knowledge of
how to proceed in organization of planned economy and with no help from the former ally or
other socialist countries, Yugoslav officials had to find or create alternative model in order to
continue the socialist reform.
%HWZHHQWKH7UXFNDQGWKH$XWRPRELOH&UHDWLQJWKH³*UHDW´&KDQJH-1954
Yugoslavia was one of the least motorized countries in Europe in the interwar period.
The destruction during the Second World War was heavily felt in this sector as well - the motor
161
Kenneth M. Straus, F actory and Community in 6WDOLQ¶V 5XVVLD (Pittsburgh: University of Pittsburgh Press,
1997), 177.
55
poll in the country was more than halved.162 With the main priorities after the war being
reconstruction of the country and its economy, it is not surprising that the prewar number of
passenger automobiles was reached again only in 1956, when domestic production had already
started.163 According to official Yugoslav estimates, in 1957 only Turkey had a lower level of
motorization in Europe.164 This also shows how slow was the departure from the Soviet model
of motorization, in which the emphasis was on truck production. Compared to the prewar level,
the number of trucks in Yugoslavia in 1956 was five times higher while the number of
automobiles surpassed the number of trucks only in 1958.165
However, the plans for passenger automobile production were constantly present among
the officials and government bodies charged with the development of motor industry.
Passenger automobiles were first mentioned in March 1947 in one of the top secret reports
about the plans for the development of the automobile industry in Yugoslavia. Signed, and
PRVW OLNHO\ HQYLVLRQHG E\ 0LUþD .adarjan, the director of the Plan in the Yugoslav motor
industry, the production of passenger automobiles was planned to start in 1957 and it seems
that the intention was to produce a mid-UDQJHRUOX[XU\PRGHO³ZLWKVHDWV´166 This kind of
attitude was completely in accordance with the Soviet model where passenger automobiles
were designed almost exclusively to be used by high ranking Party and state officials. 167 At the
162
6WDWLVWLþNL JRGLãQMDN )HGHUDWLYQH 1DURGQH 5HSXEOLNH -XJRVODYLMH >6WDWLVWLFDO <HDUERRN RI )HGHUDO 3HRSOH¶V
Republic of Yugoslavia], editions 1955-1963.
163
6WDWLVWLþNL JRGLãQMDN )HGH rativne Narodne Republike Jugoslavije >6WDWLVWLFDO <HDUERRN RI )HGHUDO 3HRSOH¶V
Republic of Yugoslavia], editions 1955-1963. In 1946 Yugoslavia had only 6.203 passenger vehicles, which was
less than half of the 1939 level.
164
AJ, fond 589 Savezni sekretarijat za industriju [Federal Secretariat for Industry], file 183 (in further reference
AJ, 589 SSI, 183). $QDOL]DSRWUHEDLPRJXüQRVWLSODVPDQDSUHGYLÿHQHSURL]YRGQMH motornih vozila [The Analysis
of Needs and Possibilities of Marketing of Expected Motor Vehicle Production], 1957, 12.
165
6WDWLVWLþNL JRGLãQMDN )HGHUDWLYQH 1DURGQH 5HSXEOLNH -XJRVODYLMH >6WDWLVWLFDO <HDUERRN RI )HGHUDO 3HRSOH¶V
Republic of Yugoslavia], editions 1955-1963.
166
AJ, 108 GDSIM, 30-52/787. Plan kapitalne izgradnje [The Plan of the Capital Construction], filed as a top
secret report, March 19, 1947.
167
:+3DUNHU³7KH6RYLHW0RWRU,QGXVWU\´Soviet Studies XXXII, no. 4 (October 1980): 515-518.
56
VDPHWLPHLQH[FHSWIRUWKH*HUPDQ³9RONVZDJHQ´ZKLFKKDGRQO\MXVWUHFRYHUHGIURP
the war, no other automobile factory produced small, economic vehicles.
On the other hand, already in April 1948 planners developed detailed plan for the
production of 50 passenger automobiles per day, and emphasized that the production model
should have ³WKH DWWULEXWHV DQG SRZHU VLPLODU WR $PHULFDQ DXWRPRELOHV LQ WKH FXUUHQW
SURGXFWLRQ´168 More importantly, this plan was based on the American model of automobile
production which is visible throughout the planning document and also in the estimate that
³1RUWK$PHULFDZLOOEHLUUHSODFHDEOHDVDVXSSOLHURIVRPHW\SHVRIPDFKLQHVDQGGHYLFHV´ 169
At the same time, it was emphasized that the technical assistance in the automobile factory
GHVLJQDV ZHOODVWKHQHFHVVDU\PDFKLQHV³FRXOG PRVWO\EHREWDLQHGLQ ,WDO\´170 This project
even had all of the components of the classical scenario of a technology transfer: the small
JURXSRI,WDOLDQ³WHFKQLFLDQVDQGFR-ZRUNHUVIURPWKHGLUHFWRUWRIRUHPHQ´ZDVWREHLQYLWHG
to Yugoslavia, and engaged in the factory design and its startup. At the same time, they were
H[SHFWHGWRDFWDVFKLHIHGXFDWRUVRI³ORFDOHOHPHQWVZKRZRXOGEHJUDGXDOO\LQWURGXFHGWRWKH
WHFKQRORJLFDO DQGRUJDQL]DWLRQDO SURFHVVHV´PDNLQJWKLV JURXSWKHPDLQ DJHQW RIWHFKQRORJ\
transfer.171
The Tito-Stalin split, which became public in June 1948 only few months after this plan
was created, seems to be the prime reason why this project was shelved. However, the
important fact is that Yugoslav officials were open to cooperation with Italian companies even
before the split with the Soviet Union. However, this was actually not that surprising. While
168
AJ, 108 GDSIM, 28-43/10-16 Projekat za proizvodnju 50 kom. automobilskih kola na dan u jednoj radnoj
smeni [Project for production of 50 automobiles per day in one work shift], April 15, 1948 .
169
Ibid. In this 7 page document, all the details
170
Ibid.
171
,ELG ,Q WKLV GRFXPHQW ³,WDOLDQV´ ZHUH XVHG DV DQ H[DPSOH KRZ WKH ZKROH SURFHVV ZRXOG EH FDrried out,
however, the choice is highly suggestive and seem to reveal how Italy was sort of a role-model for Yugoslavia,
even though not the only one.
57
Italy and Yugoslavia had their unresolved territorial issues, the so-called Trieste crisis, Italy
ZDV <XJRVODYLD¶V ELJJHVW WUDGLQJ SDUWQHU GXULQJ WKH LQWHUZDU SHULRG, and trading contacts
between the two structurally compatible economies were quickly reestablished after the war,
DQGE\WKHODWHV<XJRVODYLD³FRQGXFWHGWKHODUJHVWFRXQWU\VKDUHRILWVIRUHLJQWUDGHZLWK
,WDO\´172
Cooperation between the two countries in the development of tractor production in
Yugoslavia confirms this relationship. After negotiations with the Soviet Union about the
license for the tractor production in Yugoslavia collapsed in late 1947 (chapter 3.1), Yugoslav
officials tried to reopen negotiations with the Hungarian manufacturer in the following year, yet
EHFDXVH RI WKH ³ZHOO NQRZQ HUURQHRXV DWWLWXGH RI +XQJDULDQ 3DUW\ OHDGHUVKLS WRZDUGV RXU
><XJRVODY@ VRFLDOLVW GHYHORSPHQW´ WKHVH QHJRWLDWLRQV ZHUH VRRQ DEDQGRQHG $OUHDG\ LQ
September 1948 a license was acquired from the Italian manufacturers Ansaldo and Alfa
Romeo.173 These negotiations produced economic benefit for both sides ± Yugoslavia was
desperate to find a partner willing to sell the necessary technology, while Italy at that point was
equally pressured to find the buyers for tractors and other products of its agricultural machinery
industry.174 Furthermore, by July 1949 at least five Italian engineers and technicians came to
Yugoslavia as a part of the license agreement with the Italian companies in order to help with
the startup of the tractor production.175 This entire project was officially coordinated by
172
-RKQ 5 /DPSH 5XVVHOO 2 3ULFNHWW DQG /MXELãD 6$GDPRYLü Yugoslav-American economic relations since
World War II (Durham : Duke University Press, c1990), 47- 0LOMNRYLü 6SROMQRSROLWLþNL NRQWHNVW UD]YRMD
automobilizma u Beogradu, 1937-1939, 28.
173
AJ, 108 GDSIM, 28-43/448. Pro Memorium SUREOHPDWLNHSURL]YRGQMHWUDNWRUDXQDãRM]HPOMLQDED]LQDEDYNH
inostrane licence [ Pro Memorium of Problems in the Tractor Production in Our Country on the Basis of
$FTXLUHPHQW RI WKH )RUHLJQ /LFHQVH@ -DQXDU\ $OID 5RPHR GLHVHO HQJLQHV ZHUH SRZHULQJ ³$QVDOGR´
tractors which is the reason why negotiations were conducted with both of these factories.
174
AJ, 108 GDSIM, 28-43/437. Analysis of the Contract with the Italian Tractor Manufacturer Ansaldo, February
21, 1949.
175
AJ, 108 GDSIM, 4-'RELMDQMHXOD]QLKYL]D]DLWDOLMDQVNHVWUXþQMDNH>$SSURYDORI(QWU\9LVDVIRU,WDOLDQ
Experts], July 22, 1949.
58
Yugoslav Ministry of heavy industry, while the license contract was signed between the Central
Directorate of the Federal Motor Industry and the Italian manufacturers. It is interesting that it
did not differ much from the previous plans created for automobile production, at least
concerning the basic mechanism of technology transfer.
These negotiations seem to suggest that despite political problems, the economic
impulses and necessities played a more important role in the establishment of the cooperation
between the two countries. More importantly, in the period when Yugoslavia was boycotted by
the Eastern bloc countries and at the same time still not recognized as a true renegade by the
West, Italy was willing to establish lasting cooperation with its Eastern neighbor, which is at
least surprising. From the American point of view, Yugoslavia was still considered as Soviet
ally, and it took almost a full year after the split before any tangible help to Yugoslavia was
approved, after Yugoslav open and continuous requests for assistance. The first American
credit line, which came through U.S. Export-Import Bank in Washington, was approved in May
1949.176
At the same time, the American diplomacy was very active in Italy where its main goal
was to prevent the political takeover by the Italian Communists. In one of the Central
,QWHOOLJHQFH $JHQF\¶V &,$ UHSRUWV FRQFHUQLQJ WKHVH PDWWHUV LW LV VWDWHG WKDW WKH ³HFRQRPLF
recovery, economic cooperation and economic reform were our [American] interrelated
REMHFWLYHV´LQDQHIIRUWWRXQGHUPLQHWKH&RPPXQLVW3DUW\SRSXODULW\LQ,WDO\ 177 Furthermore,
in one of the similar documents from the 1960s, Italy was recognized for playing an active role
176
/DPSH 3ULFNHWW DQG$GDPRYLü -31. USA government banned the export of oil rigs Yugoslavia wanted to
buy in September 1948 since the estimate was that the technology could fall into the Soviet hands, and in summer
of the same year Yugoslav license request for a turnkey project of an American mill for steel production was also
rejected. In the changed political climate, this project was eventually approved by the end of 1949.
177
&HQWUDO,QWHOOLJHQFH$JHQF\³$Q(YDOXDWLRQRI3V\FKRORJLFDO(IIHFWRIWKH86(IIRUWLQ,WDO\´)HEUXDU\
1953,http://www.foia.cia.gov/sites/default/files/document_conversions/5829/CIA-RDP80R01731R0032000400098.pdf, accessed May 26, 2013.
59
LQ WKH $PHULFDQ IRUHLJQ SROLF\ LQ WKH SURMHFW RI ³EULGJH EXLOGLQJ´ RU LQ RWKHU ZRUGV
establishing communication with the countries behind the Iron Curtain in cases where the
American diplomacy could not, or did not want to be officially present.178 While this evidence
comes from the later period, it is highly unlikely that cooperation between Italy and the USA in
³EULGJHEXLOGLQJ´VWDUWHGRQO\LQWKHV,QWKHODWHVWKLVNLQGRIFRYHUWZRUNVHHPWR
bH VHW EHKLQG WKH RSHUDWLRQV RI 8QLWHG 1DWLRQV¶ (FRQRPLF DQG 6RFLDO &RXQFLO (&262&
ZKLFK ZDV DFWLQJ DV PHGLDWRU EHWZHHQ ,WDO\ DQG WKH FRXQWULHV RI ³SHRSOH¶V GHPRFUDFLHV´ LQ
their economic cooperation and especially in the field of technical assistance.179
While the official Yugoslav documents are silent on this topic, it seems probable that
establishing license agreement between Yugoslav government and Italian manufacturers for the
SURGXFWLRQ RI WUDFWRUV ZDV RQH RI WKH ³WULDO-EDOORRQV´ RI WKH $PHULFDQ GLSORPacy towards
<XJRVODYLDRURQHRIWKHHDUO\VLJQVRI JRRGZLOOWKURXJKZKLFKWKHVLQFHULW\RI<XJRVODY¶V
³KLVWRULFDO12WR6WDOLQ´ZDVSUREHG)XUWKHUPRUHWKHVXFFHVVRIWKLVSURMHFWFRXOGDOVRPHDQ
WKHRSHQLQJRIDWOHDVWRQHRIWKH³EULGJHV´IRUFRPPXQLcation with Yugoslavia whose position
³EHKLQG´RU³LQIURQW´RIWKH,URQ&XUWDLQZDVDQ\WKLQJEXWILUPO\HVWDEOLVKHGDWWKDWSRLQW$
OLFHQVHIRUWUDFWRUVZDVDOVR³EXOOHW-SURRI´GHDOVLQFHWKLVNLQGRIWHFKQRORJ\ZDVZHOONQRZQ
to the Soviets, and even if Yugoslavia reverted again, the damage would be minimal. Finally,
intensification of the economic communication between Yugoslavia and Italy was also
important for the American diplomacy in the difficult and slow process of solving the border
disputes between these countries, which was an important American goal, as cited CIA
documents suggest.
178
&HQWUDO ,QWHOOLJHQFH$JHQF\ ³%ULGJHV WR WKH (DVWHUQ (XURSH´ PHPRUDQGXP IRU WKH 'irector of the Central
Intelligence Agency, June 25, 1964. http://www.foia.cia.gov/docs/DOC_0000427966/DOC_0000427966.pdf,
accessed on May 26, 2013.
179
AJ, 108 GDSIM, 28-43/437. Analysis of the Contract with the Italian Tractor Manufacturer Ansaldo, February
21, 1949.
60
While the establishment of tractor production using Italian license proved to be a
success, Yugoslavia was facing more serious economic challenges. Left without any kind of
support from the Eastern bloc countries, whether in credit lines, raw industrial materials or
technical support, in the 1949-1950 period Yugoslav economy faltered and many factories,
being unable to continue production, were on the brink of closure. Thus, the ambitious First
Five Year Plan introduced in 1947, already by late 1948 was rendered inoperable and the
situation was further complicated by food shortages caused by belated forced collectivization of
1949, and severe droughts of 1950 and 1952.180
Gradually recognizing the full political potential of having economically prosperous but
still socialist Yugoslavia outside the Soviet sphere of influence and using it as a specific road
sign for other socialist countries behind the Iron Curtain, the American administration started a
project of economic and military assistance to Yugoslavia. 181 Many countries from Western
Europe also participated in this project, extending their aid through donations and loans.182
However, while this immediate assistance helped Yugoslavia to soothe the pain of an ongoing
economic crisis, in order to make Yugoslav economy economically sound and able to repay the
loans, amore long-term solution was needed. One of the first and most logical demands of
<XJRVODYLD¶V :HVWHUQ SDUWQers was the reform of the economy in order to make it more
competitive in the world market and able to offer more diverse goods, rather than various ores
and other raw materials.183
6WULNLQJO\WKURXJKRXW WKHHDUO\VWKH <XJRVODYJRYHUQPHQW ZDVVWLOO³Sursuing a
/HQLQLVW FRXUVH´ ZKLFK LQ WKH HFRQRPLF ODQJXDJH EDVHG RQ WKH ³%ROVKHYLN PHQWDOLW\ RI WKH
180
/DPSH3ULFNHWWDQG$GDPRYLü
9XþHWLü
182
/DPSH3ULFNHWWDQG$GDPRYLü
183
/DPSH3ULFNHWWDQG$GDPRYLü3OHãWLQD
181
61
ODSVHG<XJRVODY%ROVKHYLNV´PHDQWSURGXFWLRQRIVWHHOHOHFWULFSODQWVRLOUHILQHULHVHWFEXW
basically not export-oriented commodities.184 However, already in late 1950 Marshall Tito
admitted to the American president of the International Bank of Reconstruction and
Development (IBRD), the institution through which the majority of loans to Yugoslavia were
GLVWULEXWHG WKDW ³WKH UDWLRQDOH IRU JRLQJ DKHDG ZLWK steel production was political, to keep a
SOHGJH ZKRVH IRUIHLWXUH WKH 6RYLHWV DQG WKHLU V\PSDWKL]HUV ZRXOG VHL]H XSRQ´185 While this
HSLVRGHVKRZHG7LWR¶VJUHDWSROLWLFDOWDOHQWLWVHHPVWKDWKHZDVZHOODZDUHWKDWWKHVWDELOLW\RI
the Yugoslav regime depended on his ability to preserve a stable economy and to maintain a
constant rise in industrial production and living standards. Taking into consideration what has
been said so far about the American policy in Italy, it is not surprising that Yugoslav economic
GHYHORSPHQWDOVREHFDPHWKHPDLQWRROLQWKH&,$¶VVWUDWHJ\RI³NHHSLQJ7LWRDIORDW´186
The changing attitude of the Yugoslav government towards the structure of the
FRXQWU\¶V HFRQRPLF GHYHORSPHQW FDQ EH VHHQ IURP WKH DQDO\VLV RI WKH FRQWUDFWV RI WHFKQical
cooperation signed in the period 1954-1962, overwhelmingly with West European companies.
This kind of cooperation in Yugoslavia was legally based on the 1954 Regulation for the
Acquisition of Industrial Property Rights Abroad.187 In the 1954-1962 period, the total of 232
contracts for acquisition of the foreign technical documentation were officially registered. 188
Out of this number, 189 or 81.46% were contracts for the acquisition of the technical
184
/DPSH3ULFNHWWDQG$GDPRYLü
Ibid., 37.
186
9XþHWLü
187
AJ, fund 589 Savezni sekretarijat za industriju [Federal Secretariat for the Industry], file 296 (in further
reference AJ, 589 SSI, 296). Analiza registrovanih ugovora o pribavljanju prava industrijske svojine u inostranstvu
[The Analysis of Registered Contracts of the Acquisition of Industrial Property Rights Abroad] (Belgrade, 1962),
4.
188
AJ, 589 SSI, 296. The Analysis of Registered Contracts, 19-20. It is explicitly noted in this document that
license agreements were also signed with foreign partners before 1954, but that the official records started to be
kept only then since their number started rapidly to rise.
185
62
documentation for production of various products.189 The important thing noticed in the
GRFXPHQWVLVWKDW<XJRVODYLQGXVWU\³DFTXLVLWLRQHGRQO\WKRVHIRUHLJQDFKLHYHPHQWZKLFKDUH
RI SHULSKHUDO DQG QRW IXQGDPHQWDO VLJQLILFDQFH´190 In other words, Yugoslavia was
SUHGRPLQDQWO\ REWDLQLQJ ³LQIRUPDWLRQ´ DQG QRW ³WHFKQRORJ\´ DV VXFK DOWRJHWKHU PDNLQJ
probabilities for a successful technology transfer highly unlikely, or at least heavily reliant on
internal development (compare with chapters 1.2 and 4.3).
Another thing which can be observed from this analysis is that 23 contracts or roughly
10% were directly related to the automobile and motor industry, while further 116 were related
to machine building and metal industry and additional 49 in electric and chemical industry. In
total, 188 or 81.03% of all the contracts of technical cooperation were focused on these five
sectors.191 What these numbers seem to suggest is that, even though the automobile industry
came only at a fourth place regarding the number of signed license agreements with foreign
partners, due to its potential for linking with other industrial branches, such as machine
building, metal, electric and chemical industry, Yugoslav government did in fact based its
industrialization strategy on the automobile industry as at least one of the leading sectors
(chapter 1.3). Furthermore, it was officially estimated that by 1959, roughly 45% of all
FRQWUDFWVZHUH³RULHQWDWHGWRWKHSURGXFWLRQRIPDVV-FRQVXPHUJRRGV´ZKLFKLVLPSRUWDQWSURRI
of a structural change in Yugoslav industry which during the 1950s switched from heavy and
military industry to civilian program and consumer goods. 192 Finally, concerning the countries
RIRULJLQDZKRSSLQJRIOLFHQVHVZHUHDFTXLVLWLRQHGIRUPWKH³:HVWHUQFRXQWULHV´ZLWK
West Germany in the lead (65) and Italy (51) closely following. The reasons for this kind of
189
Ibid., 20.
AJ, 589 SSI, 296. The Analysis of Registered Contracts, 20.
191
Ibid., 26.
192
Ibid., 33.
190
63
GLYLVLRQ ZHUHIRXQGLQ WKH³FORVHQHLJKERUKRRGWUDGLWLRQDOUHOLDQFHRQLQGXVWULDOH[SHULHQFHV
RIWKHVHFRXQWULHVDQGGHYHORSHGWUDGHUHODWLRQV´193
This entire development and start of the intensive cooperation with Western European
FRXQWULHVE\LVFRQVLVWHQWZLWK/DPSH¶VUHVXOWVZKHUHKHHPSKDVL]HVWKDWWKH$PHULFDQ
DGPLQLVWUDWLRQHVWLPDWHGWKDW³7LWR¶VUHJLPHKDGWKHVRXUFHVWRVXUYLYHSK\VLFDOO\ZLWKRXW86
DLG´ HYHQ WKRXJK WKHUH ZHUH VRPH FRQFHUQV DERXW WKH <XJRVODY¶V HFRQRP\ DELOLW\ WR
participate in the increasingly complex international market. 194 As a result, Yugoslavia
HVWDEOLVKHG ³D IXOO VHW RI FRPPHUFLDO UHODWLRQV ZLWK :HVWHUQ (XURSH´ GXULQJ WKH -1964
period. However, the significant expansion of these relations in the late 1950s coincided with
the period when the American administration gave the Yugoslav government nine loans for
industrial development, aiming at long-term economic development instead of emergency
economic aid.195
Interestingly enough, the American administration based its new strategy on the
analysis of economists Max Milikan and W. W. Rostow who envisioned successful economic
GHYHORSPHQW DV D SUHFRQGLWLRQ RI HVWDEOLVKLQJ RI D ³SROLWLFDO GHPRFUDF\ RQ WKH :HVWHUQ
PRGHO´ D PRGHO WKDW ZDV Oater applied to the rest of the Third World countries.196 Without
IXUWKHUDQDO\VLVRI5RVWRZ¶VDQG0LOLNDQ¶VLGHDVLWLVQRQHWKHOHVVLQWHUHVWLQJKRZLQWKHV
<XJRVODYLDRQFHDJDLQEHFDPHDWHVWLQJJURXQGIRURQHRIWKH&ROG:DUVXSHUSRZHUV¶SROLFLHV
directed to potential allies in their sphere of influence. Most importantly, this analysis places
WKH<XJRVODYLD¶VH[SHULHQFHDVDNH\FRPSRQHQWLQWKHZLGHUSHUVSHFWLYHRILQGXVWULDOL]DWLRQRI
the Third World countries.
193
AJ, 589 SSI, 296. The Analysis of Registered Contracts, 34, 37 In the 1954-1962 period, there were only 9 out
RIFRQWUDFWVRIWHFKQLFDOFRRSHUDWLRQZLWK³WKH(DVWHUQFRXQWULHV´
194
/DPSH3ULFNHWWDQG$GDPRYLü
195
Ibid., 60-61.
196
Ibid., 61-62.
64
However, the change in the structure of Yugoslav industrial production was very
gradual. Focusing on the Crvena Zastava factory, the established pre-war armament and
ammunition factory in Kragujevac, it took almost a full decade after the Tito-Stalin split for the
transition to a civilian program of production.197 The first attempt for establishing of the
automobile production in Kragujevac was in 1953 and it was based on the contract with the
$PHULFDQPDQXIDFWXUHU³:LOO\V-2YHUODQG´IRUWKHSURGXFWLRQRID³-HHS´DZHOO-known army
off-road vehicle, not passenger automobiles.198 These vehicles became popular in Yugoslavia
already in 1945 through the United Nations Relief and Rehabilitation Administration
8155$ SURJUDP SDUW RI ZKLFK ZHUH $PHULFDQ WUXFNV DQG ³-HHSV´ 199 However, after the
assembly of only 162 vehicles, further cooperation with the American company was abandoned
EHFDXVH ³:LOO\V-2YHUODQG´ GHPDQGHG D SHUFHQWDJH RQ HDFK YHKLFOH DVVHPEOHG LQ
Yugoslavia.200 Taking into consideration the changed attitude of the American administration
towards Yugoslav economic capabilities, which happened in the same year, it seems likely that
Yugoslav side expected to receive this license as a part of the American aid package, not
WKURXJKDFRPPHUFLDOFRQWUDFWEHWZHHQWKHWZRFRPSDQLHVDQGWKDWWKLV³GLVDSSRLQWPHQW´OHG
to the abandonment of this project.
In the second attempt to establish automobile production, signs of at least some
consideration for the civilian program were visible. In 1954 the Yugoslav government
announced an international competition for the license agreement and several companies from
197
Its pre-war name 9RMQRWHKQLþNL ]DYRG [Military-Technical Institute] was in 1953 changed to Zavodi Crvena
Zastava [The Red Flag Institute].
198
Slobodan -DQNRYLü, Zapisi o Zastavi [Records of Zastava] (Kragujevac: Zavodi Crvena Zastava, 1993), 32-33.
199
Ⱥȳ 17 Ministarstvo industrije vlade FNRJ [The Ministry of Industry of the FPRY Government], file 121,
archival unit 122/332 (in further reference AJ, 17 MI, 121-122/332). Distribution of vehicles received from
UNRRA, October 13, 1945.
200
-DQNRYLü -35. The ³Willys-2YHUODQG³ FRPSDQ\ GHPDQGHG RQ HDFK YHKLFOH DVVHPEOHG DQG VROG LQ
Yugoslavia, and 6% of the value of each component produced in the country.
65
Western Europe and the USA applied.201 Even though the Yugoslav side was still
predominantly interested in the production for the Yugoslav Army, during the trial runs of the
YHKLFOHV³RSLQLRQVFU\VWDOOL]HG´WKDWWKH&UYHQD=DVWDYDIDFWRU\VKRXOGDOVRSURGXFHOLJKW
ton commercial trucks and passenger automobiles.202 The only company which was able to
offer all of these vehicles was Italian Fiat, which eventually won the competition, and the
license agreement between Fiat and Crvena Zastava was signed on August 12, 1954, in
Turin.203
Cooperation with the Italian manufacturer had an important impact on the Yugoslav
SURMHFWRIWUDQVIRUPLQJWKHVWUXFWXUHRILWVLQGXVWU\)LDWZDVFRQVLGHUHGDWWKHWLPHDVWKH³Eest
known example of an engineering firm that was able to renew its plants thanks to the Marshall
3ODQ´ DQG WKLV FRPSDQ\ ZDV DOVR WKH SULPH EHQHILFLDU\ RI WKH $PHULFDQ DLG LQ ,WDO\ $V D
consequence, it controlled more than 80 percent of the entire Italian automobile market and
already in the early 1950s was exporting roughly 30 percent of its total production. 204 One of
WKH PDLQ UHDVRQV IRU )LDW¶V VXFFHVV ZDV HDUO\ DFTXLVLWLRQ DQG VXEVHTXHQW DGDSWDWLRQ RI WKH
American model of automobile production to the Italian social and economic environment. But
HYHQ LI ³,WDO\¶V LQGXVWULDO VWUXFWXUH ZDV QRW HQWLUHO\ $PHULFDQL]HG $PHULFDQ WHFKQRORJ\ DQG
business accomplishments remained a constant point of reference, an inspiring model which
created a constant pressure fRU FKDQJH´205 Being economically challenged the Italian
SRSXODWLRQ FRXOG QRW DIIRUG VSDFLRXV $PHULFDQ ³JDV-JX]]OHUV´ \HW WKH DXWRPRELOH LQGXVWU\
201
-DQNRYLü)URP)UDQFHWKHUH were Renault and Delahaye, from Italy Fiat and Alfa Romeo, from England
Rover and Austin, from Austria Jenbacher and from the USA Willys-Overland.
202
Ibid., 39.
203
Ibid., 38-39, 43.
204
)DXUL´6XUYLYLQJ LQ WKH *OREDO 0DUNHW µ$PHULFDQL]DWLRQ¶ DQG WKH 5HODXQFK of Italy's Car Industry after the
Second World War´)UDQFHVFD)DXUL³The Role of Fiat in the Development of the Italian Car Industry in the
1950's´ The Business History Review 70, no. 2 (Summer, 1996): 178, 180-181, 184. In 1951 Fiat exported 21% of
its production, and by 1959 this number rose to 39%; in 1958 Fiat held 83.1% of the Italian market and in 1960
³)LDW¶V´VKDUHVOLJKWO\GHFUHDVHGWR
205
)DXUL´Surviving in the Global Market«´43.
66
could still benefit from the economies of scale in mass production of automobiles. Therefore,
already in 1955 Fiat introduced a small family automobile, the Fiat 600, which became the
IDFWRU\¶V PDLQ SURGXFWLRQ PRGHO XQWLO WKH V 7KH FOLPDWH LQ WKH DXWRPRELOH PDUNHW
throughout Western Europe was similar, and the automobile proved to be a great success. 206
Furthermore, since the stability of the Italian market was fragile, Fiat adopted two distinctive
strategies in order to forestall possible economic damages: (1) the diversification of models in
RUGHUWRGLYLGHULVNVRISRVVLEOHIDLOHGSURMHFWVDQGWR³DGMXVWIDVWHUWRRXWVLGHFRPSHWLWRUV´
and (2) focusing on export, basically for the same reasons.207
All these attributes were significant for Fiat to win the competition in Yugoslavia. But
probably the most important reason for its success was its strategy of expanding the production
and sales via the establishment of subsidiary assembly facilities, predominantly in Latin
America, but in other Third World countries as well. In the short period between 1954 and
1955 Fiat opened assembly facilities in Argentina, Brazil, Mexico and Venezuela, projects on
which 6.2 billion liras were invested, but at the same time the company spent an additional 4.8
billion liras on similar projects in Europe. The first project was in Spain where Fiat helped
Spanish government to start the national automobile factory S.E.A.T. in 1953, then later in the
1950s in Austria and West Germany, and of course in Yugoslavia in 1954.208
$FFRUGLQJ WR )DXUL )LDW¶V GHYHORSPHQW VWUDWHJ\ RI WKH 7KLUG :RUOG PDUNHWV ZDV
supported by the international monetary institutions, and the company also had its projects in
Africa, though it was mostly focused on the development of the Latin American market. 209 All
of these successes prompted several contemporary authors to contemplate about Italian
206
Laux, 174, 198-199.
)DXUL³The Role of Fiat«´ 183-186.
208
Ibid., 188-189; Laux, 198; G. N. Georgano (ed.), The Complete Encyclopedia of Motorcars, 1885 to the Present
(London: Ebury Press, 19732), 297.
209
)DXUL³The Role of Fiat«´-190.
207
67
economic development being based on the export-led growth, and solely on the automobile
sector.210 Eventually Fiat grew powerful enough to be able to shape the government tariff
policies through constant lobbying for the protection of its production and position on local
market DQG E\ H[SORLWLQJ WKH JRYHUQPHQW¶V FRQVWDQW IHDUV RI XQHPSOR\PHQW DQG SRWHQWLDO
consequent rise of popularity of the Communist Party among general population.211
For the Yugoslav officials Fiat evidently was the most obvious choice as a partner to
develop the Yugoslav automobile industry. Having established contacts and cooperation with
several Italian companies already in the late 1940s, combined with geographical proximity and
VWUXFWXUDOFRPSDWLELOLW\RIWKHWZRHFRQRPLHV<XJRVODYLD¶VH[SDQVLRQRIWKLVFRoperation was
DW OHDVW SUHGLFWDEOH 7KH UROH RI WKH )LDW LQ OHDGLQJ ,WDO\¶V LQGXVWULDOL]DWLRQ LWV EDVLV RQ
American technology and production model, and its almost monopolistic did not go unnoticed
in Yugoslavia. The Yugoslav government, pressured by the American administration to
establish production of the mass consumer goods in order to erect self-sustainable and market
competitive economy, eventually made license agreement with Fiat and in the mid 1950s
started the production of the passenger automobiles. However reluctant Yugoslav government
may have been to change the structure of its industry, archival material suggests that the
automobile industry in the second half of the 1950s became the leading sector of Yugoslav
LQGXVWU\DQGWKH³PRWRU´RILQGXVtrialization process.
)LQDOO\ DV WKH SURYHUELDO ³LFLQJ RQ WKH FDNH´ WKH /RQGRQ 0HPRUDQGXP EHWZHHQ
Yugoslavia and Italy was signed on October 5, 1954, thus ending almost a full decade of
territorial feuds between the two countries; this agreement was soon followed by a new contract
of economic cooperation in 1955. While the role of the American diplomacy in conducting and
210
211
)DXUL³The Role of Fiat«´
Ibid., 181-182; 205-206.
68
solving these multilayered and interconnected problems between Yugoslavia and Italy lays
outside the framework of this thesis, it is nonetheless important to note that the cooperation
between the two countries was established through technology transfer and without doubt
KHOSHGWRFUHDWHLIQRWSHUPDQHQWWKDQDWOHDVWORQJODVWLQJ³EULGJH´RIFRPPXQLFDWLRQEHWZHHQ
these three countries.
³&DGUHV'HFLGH(YHU\WKLQJ´&RQVROLGDWLQJWKH&KDQJH-1962
³5HVLVWDQFHV ZHUH YDULRXV 1RQHWKHOHVV ZH PDQDJHG WR IRUPDOL]H DXWRPRELOH
production through Economic Council even though this production was contested the usual
way: who will buy automobiles? I was, as usual, claiming that we cannot be separated from the
rest of the world, and if we were building socialism, it does not mean that we should be stricken
E\SRYHUW\´0LMDONR7RGRURYLü-Plavi, one of the high-ranking LCY leaders )212
These ZRUGV RI 0LMDONR 7RGRURYLü-Plavi encapsulate some of the essential problems
arising as a consequence of the structural change of Yugoslav industry. The actual
implementation of the contract with Fiat and securing the necessary governmental support for
this whole project was much more difficult. The Crvena Zastava factory had a tradition and
experience of a full century of production exclusively for the military purposes, and any change
of the production program, especially as radical as a switch from a military to a civilian
program, necessitated a lot of muscle and persuasion in order to be successively realized.
Bearing this in mind, the way the formal change was made and consolidated, and who were the
true agents of it, is the crucial for better understanding of the specificities of the Yugoslav
political and economic system.
212
-DQNRYLü,QWHUYLHZZLWK0LMDONR7RGRURYLü-Plavi, given to the author in 1992.
69
Before moving to the Crvena Zastava case, it is essential to emphasize some important
consequences of the Tito-Stalin split of 1948 had on the official policies of industrialization in
Yugoslavia. The Yugoslav authorities already in 1948 relocated almost all of the strategic
industrial facilities farther to the West, predominantly to Bosnia and Slovenia, with military
and motor industry being dislocated first. Thus, the IMR truck factory, which was in the
process of mastering the truck production, had to transfer its complete program with blueprints
and necessary machines to the TAM factory in Slovenia.213 The Crvena Zastava factory
experienced similar destiny since much of the existing military program was relocated to
Bosnia: the cannon production went to Travnik and the optical instruments program to
Sarajevo.214 There were even plans for the relocation of the entire remaining facilities from
Kragujevac to a Western parts of Croatia, but these plans were never realized.215 While this
strategy may have been based on some sound logic, for Serbia, as the most Eastern republic, it
in effect meant immediate de-industrialization and consequent widening of the regional
differences in the level of economic development. With the majority of the production program
dislocated, the Crvena Zastava factory was struggling to find new program in order to maintain
some sort of production and to avoid mass layoffs.216
Furthermore, besides immediate strategic considerations, the 1948 break with the Soviet
8QLRQ³LPSRVHGDFHUWDLQVWUDWHJ\RIGHYHORSPHQW´LQZKLFKWKH³PD[LPL]DWLRQRIJURZWKDQG
the attainment of self-VXIILFLHQF\EHFDPHDOPRVWH[FOXVLYHSUHRFFXSDWLRQV´217 In practice this
meant that a majority of investments in industrialization, other than the military industry which
213
0LOHQD 7UãLü XU Tovarna avtomobilov in motorjev Maribor, 1947-1987 [Automobile and Motor FactoryMaribor] (Maribor: Tovarna avtomobilov in Motorjev, 1987), 4-5.
214
JaQNRYLü-24.
215
=HþHYLü
216
The factory was producing plows and other agricultural tools, and was at the same time giving assistance to
RWKHUIDFWRULHVSURGXFLQJRUFHUWDLQPRUHFRPSOH[FRPSRQHQWVRUPDFKLQHWRROV=HþHYLü passim.
217
3OHãWLQD-28.
70
was being rapidly developed in Bosnia, went to the most developed regions and industrial
sectors in order to achieve maximum output, optimum growth and overall self-sufficiency.
Therefore, proportionally most investments went to Slovenia as the most developed republic
VLQFHZHUHH[SHFWHGWROHDGWR³WKHTXLFNHVWRXWSXWPD[LPL]DWLRQ´218 ,QWKDWVHQVH0DOHFNL¶V
DVVXPSWLRQWKDW³>U@HJLRQDOSROLFLHVLQXQGHUGHYHORSHGFRXQWULHVZHUHIUHTXHQtly only parts of
ODUJHUQDWLRQDOSROLFLHVIRUPRGHUQL]DWLRQ´LQWKHSRVW-1948 Yugoslavia was clearly realized.219
+RZHYHUE\WKHHDUO\VDQGHVSHFLDOO\DIWHU6WDOLQ¶VGHDWKLQWKH<XJRVODY
geopolitical position was dramatically improved and the perceived threat from the Soviet Union
lessened, and this was followed by formal decentralization and democratization of the political
and economic system in Yugoslavia.220 One such policy was the Yugoslav specific system of
self-management in factories, which will be discussed in the following chapter, but more
important for investment and development projects more important was the establishment of
the General Investment Fund (GIF) in 1952.221 The basic idea behind the establishment of the
GIF was the slow introduction of market economy principles, since the companies were
supposed to compete with each other for free credit and investment loans based on their
projects profitability. However, the idea backfired and the whole system became vulnerable to
³LQIRUPDO SUHVVXUH E\ SROLWLFLDQ ZKR MRFNH\HG IRU LQYHVWPHQWV IRU µWKHLU¶ UHSXEOLF UHJLRQ RU
WRZQ´ZKLOHDWWKHVDPHWLPHHYHQLQLQVWDQFHVRIXQELDVHGWUHDWPHQWE\WKH*,)WHFKQLFDOO\
less-developed regions or factories could not compete on equal terms with those who were
more developed.222
218
3OHãWLQD
Malecki, 102.
220
Democratization should be understood in a context of a socialist political system, where the idea was formal
wider participation of the population in the decision making process while at the same time the system remained
under control of a single communist party.
221
3OHãWLQD-33.
222
Ibid., 30-31. The central planning body still decided how much funds each industrial sector would get, but the
219
71
One of the key figures in these Yugoslav strategic investment projects was Mijalko
7RGRURYLü-Plavi. He was an active member of the Yugoslav Communist Party before the war
and during the war he became a political commissar of the First Proletarian Brigade, the first
regular unit of Yugoslav partisans created in late 1941; by the end of the war he became
political commissar of the First Yugoslav Army. After the war he continued his close
connections with the YA as a high-ranking executive of the Ministry of Peoples Defense,
where he headed the Military Industry Department. After 1948 he became minister of
Agriculture and Forestry, and from 1953 he was a member of the Federal Executive Council
(FEC), a body which was created in the same year and in practice acted as Yugoslav federal
government.223 +LV ZDV DOVR ERUQ LQ D VPDOO YLOODJH LQ WKH .UDJXMHYDF¶V KLQWHUODQG DQG DV D
student, right before the Second World War started, he received his practical-training in
9RMQRWHKQLþNL ]DYRG in Kragujevac as a student of electromechanical department of the
Technical Faculty in Belgrade.224
7RGRURYLüVKRZHG JUHDWLQWHUHVW LQ WKHGHYHORSPHQW RIWKHDXWRPRELOH LQGXVWU\LQ WKH
country, which is confirmed in various sources. At least during the 1955-56 period many
Yugoslav motor industry factories (motors, trucks, automobiles, chassis, etc.) sent their mail
DQG FRPSODLQWV GLUHFWO\ ³LQWR WKH KDQGV RI FRPUDGH 0LMDONR 7RGRURYLü´ 225 =HþHYLü DOVR
confirms that during the installations of machinery in one of the newly setup workshop in the
&UYHQD =DVWDYD IDFWRU\ LQ 7RGRURYLü ZDV IUHTXHQWO\ YLVLWLQJ WKH IDFLOLWLHV DQG KH ZDV
³HVSHFLDOO\LQWHUHVWHG>«@LIPRGHUQVROXWLRQVIRUVHULDOSURGXFWLRQ>«@ZHUHEHLQJDSSOLHGLQ
GIF actually held auctions in which companies were competing for funding.
223
Narodni heroji Jugoslavije II [Yugoslav National Heroes, vol. 2] (Beograd: Partizanska knjiga, 1982), 326-DQNRYLü
224
-DQNRYLü
225
AJ, fund 253 8GUXåHQMH SURL]YRÿDþD PRWRUD L PRWRUQLK YR]LOD [Association of Motor and Motor Vehicle
Producers], box 1 (in further reference AJ, 253, 1). Complaint of the Yugoslav bus factories concerning the import
of foreign buses, March 15, 1956.
72
order to prevent transfer of experiences from previous craft-serial production of military sector,
ZKLFKKHRIWHQFULWLFL]HG´226 In 1955 he also managed to install his friend from university and
FROOHDJXH IURP WKH 0LOLWDU\ ,QGXVWU\ 'HSDUWPHQW PDFKLQH HQJLQHHU 3UYRVODY 5DNRYLü DV D
new managing director of the whole Zavodi Crvena Zastava when automobile production
started.227 )LQDOO\7RGRURYLüZDVDYHU\FORVHDVVRFLDWHRI<XJRVODYSUHVLGHQW7LWRDQGRQDW
OHDVW RQH RFFDVLRQ KH ZDV LQ FKDUJH RI LPSRUWDQW WDVNV GXULQJ WKH 7LWR¶V DEVHQFH RQ D
diplomatic mission.228
Therefore, as an engineer and politician originating from the Kragujevac hinterland,
7RGRURYLü ZDV LQ DQ H[FHOOHQW SRVLWLRQ WR SHUVRQDOO\ VXSSRUW DQG SXVK WKH SURMHFW RI WKH
establishment of automobile industry through the official institutions. Still, the decision to start
automobile production in Kragujevac also had at least some rational reasoning behind it, since
the Crvena Zastava factory in the early 1950s was considered as one of the most efficient
industrial facilities in the country, which is not surprising since it could rely on its respectable
pre-war experience.229
In this environment no single policy of industrialization could have been successfully
implemented, as republics competed with each other for investments, using whatever means
and political connections they had. Supported by foreign investments, factories were
PXVKURRPLQJ DOO RYHU WKH FRXQWU\ DQG WKH SROLWLFLDQV ZHUH REYLRXVO\ XVLQJ D ³VKRWJXQ
226
=HþHYLü
-DQNRYLü-49.
228
$FFRUGLQJWRWKHPHPRLUVRIJHQHUDO0LODQäHåHOMFRPPDQGHURI7LWR¶VSHUVRQDOVDIHW\VHUYLFH7RGRURYLüZDV
in 1954 receiving dispatches directly from Tito who was in India at that time, concerning the expulsion of one of
high-UDQNLQJRIILFLDOVIURPWKH3DUW\0LODQ$GDPRYLü %UR]RYLVWUDKRYLNDNRMHþXYDQ7LWRLSRNXãDMLDWHQW ata:
SUHPDND]LYDQMXLGQHYQLNXJHQHUDOD0LODQDäHåHOMDNRPDQGDQWD7LWRYHJDUGHLPDUãDORYRJDÿXWDQWD >%UR]¶V
Fears: How Tito Was Guarded and Assassination Attempts (According to Telling and Diary of General Milan
äHåHOM&RPPDQGHURI7LWR
V*XDUGDQG0arshall's Adjutant] (Belgrade: Kosmos, 2004), 141.
229
3OHãWLQD
227
73
DSSURDFK´FKDSWHUVLQFH³ODFNLQJµHYHU\WKLQJ¶µDQ\WKLQJ¶ZRXOGEHXVHIXO´WKRXJKPRUH
as a production than an economic unit.230
Taking the opportunity to boost the industrialization in Serbia, local party magnates
eventually produced envy and rift between party leaderships of other republics. This is more
than evident in DVSHHFKRI9RMD5DGLüWKHILUVWSRVW-war managing director of the Crvena
=DVWDYDIDFWRU\KHOGDWRQHRIWKHZRUNHUV¶FRXQFLOPHHWLQJV
³7KHUHDUHFHUWDLQ IDFWRULHVZKLFKZHUHQRW JODG WR VHHWKDWZHDUHFUHDWLQJDPRGHUQ
automobile industry in Kragujevac. We have built several factories of automobile industry in
Yugoslavia but even today they are not working in full capacity. For example, Tezno [TAM
factory in Maribor, Slovenia] is producing a 3 ton truck, while all the rest are still in the phase
of preparation, testing some things and none of them is working seriously. Of course, the
emergence of our factory is going to considerably undermine those companies, since they were
already preparing for this industry. Our undertaking will force them to buck up, to work
IDVWHU´231
What can be read between the lines in this speech is that the specific race for taking the
share of the Yugoslav motor vehicle market by the mid 1950s was already underway between
several factories in the country, and this kind of frantic competition was most likely happening
in other industrial sectors.
In the Crvena Zastava factory this race for the market was motivated by the needs to
prevent layoffs, which were becoming necessary after the relocation of the main production
program, and to prevent the existing Slovenian TAM truck factory, the only one functional
motor vehicle factory in the country at that point, from capturing this entire market. This
inevitably evolved into competition between the Serbian and Slovenian factories and
consequently the Party leaderships of two republics.
230
Ibid., 35-36.
-DQNRYLü 6WHQRJUDSKLF QRWHV IURP WKH Ä&UYHQD =DVWDYD³ ZRUNHUV
FRXQFLO -XO\ 7KH VSHHFK RI
9RMD5DGLüPDQDJLQJGLUHFWRURIWKHFRPSDQ\
231
74
In a 1957 report of the FEC committee for the development of automobile industry, the
strategy for the next ten-year period envisioned that the majority of this sector will be
established in Serbian factories. The Crvena Zastava factory was supposed to produce army
off-terrain vehicles, passenger automobiles, and light 0.5-ton and 1.5-ton commercial vehicles.
The Fabrika automobila Priboj [Priboj Automobile Factory] (FAP), a factory which
construction only began in 1953, was designed for the heavy trucks program (4, 6 and 8 ton
WUXFNVZKLOHWKHDOUHDG\HVWDEOLVKHG6ORYHQLDQ7$0WUXFNIDFWRU\¶VZDVEDVLFDOO\SXVKHGRXW
of the market and limited to the existing production without any options to diversify its
program.232 Furthermore, the TAM program was based on the 1939 Czechoslovak model, and
by the mid 1950s it was already obsolete. Combined with the fact that the this report was
DSSURYHG DQG VLJQHG E\ 0LMDONR 7RGRURYLü LW EHFRPHV HYLGHQW KRZ KH managed to use his
political connections and government office position to reserve giant share of the potentially
leading industrial sector in the country for Serbian factories. The Crvena Zastava factory in
particular was designated as the only passenger automobile producer in the country.233
However, the Slovenian political leadership did manage to fight back. The Slovenian
FRXQWHUSDUW WR 0LMDONR 7RGRURYLü ZDV )UDQF /HVNRãHN-Luka, a veteran communist, a
JHQHUDWLRQROGHUWKDQ7RGRURYLü,QWKHHDUO\Vhe was the president of the Industrialization
&RXQFLORIWKH356ORYHQLDDQGIURPKHEHFDPHOLNH7RGRURYLüDPHPEHURIWKH)(&
His equally strong political position is confirmed by the fact that in the 1958-1963 period he
was the Chairman of the National Assembly.234 In the extremely narrow field of the motor
vehicle industry, by 1954 the Slovenian leadership managed to secure license for the
232
AJ, 589 SSI, 67. ,]YHãWDM NRPLVLMH 6DYH]QRJ L]YUãQRJ YHüD SR SUHGPHWX UD]YRMD DXWRPRELOVNH LQGXVWULMH X
FNRJ [FEC Committee Report on the Topic of the Development of Automobile Industry in FPRY], April 26, 1957.
233
AJ, 589 SSI, 296. The Analysis of Registered Contracts, Appendix, 1-6. Other Serbian factories were producing
tractors, crawlers, earth moving machines, combines and other agricultural motorized machinery.
234
Narodni heroji Jugoslavije I [Yugoslav National Heroes, vol. 1] (Beograd: Partizanska knjiga, 1982), 418.
75
SURGXFWLRQRIVFRRWHUVLQWKH7RYDUQDPRWRUQLKNROHV6HåDQD>6HåDQD0RWRU9HKLFOH)DFWRU\@
(TOMOS) in Koper, and by 1957 TAM acquisitioned a new license for truck production.235
Nonetheless, if the Slovenian factory was dissatisfied with the course of development, it can be
argued that it was in effect responsible for the beginning of this kind of race. In one of the
document of the Central Directorate of the Federal Motor Industry dating from 1949, TAM was
openly accused of extending its capital construction far beyond the provisions of the Five-Year
Plan, spending more funds than specified, and completely disregarding three consecutive
LQWHUYHQWLRQVE\WKH'LUHFWRUDWH¶VRIILFLDOV236
Furthermore, other republics also wanted their share of the market and the official
GRFXPHQWVDQGGDLO\SUHVVUHSHDWHGO\FULWLFL]HG³ORFDOLVPWHQGHQFLHV´RIVRPHIDFWRULHVZKRVH
³QDUURZ YLHZ DQG HUURQHRXV DWWLWXGH ZDV >«@ PDQLIHVWHG WKURXJK WHQGHQF\ WR SURGXFH
HYHU\WKLQJRQWKHLURZQUHMHFWLQJFRRSHUDWLRQ>«@DQGVWULYLQJWRPDLQWDLQWKHLUPRQRSROLVWLF
YLHZ´237 As a consequence, the Crvena Zastava factory was forced to accept the model of a
horizontal integration of production, having cooperative companies in each republic, even
though considering the lack of factories able to deliver mass produced and high quality
components, it would have been more sensible to have vertical integration, like in Italy where
Fiat was producing almost all of its necessary components.238 While all of this was small
satisfaction for the TAM factory which until the early 1950s had been the only motor vehicle
235
AJ, 589 SSI, 296. The Analysis RI5HJLVWHUHG&RQWUDFWV$SSHQGL[³72026´DFTXLVLWLRQHGOLFHQVHIURP
WKH$XVWULDQFRPSDQ\³6WH\U-Deimler-3XFK´DQG7$0IURP*HUPDQ'HXW]
236
AJ, 108 GDSIM, 30-52/824. Evidencija i organizacija plana izgradnje [Records and Organization of the
Construction Plan], September 6, 1949.
237
$- 66, Ä3URJUDP SURL]YRGQMH X]DMDPQLK RGQRVD NRRSHUDFLMH L SRWUHEQLK LQYHVWLFLMD SURL]YRÿDþD
motora i motornih vozila Jugoslavije u razvojnom periodu motorne industrije od 1956. do 1965. [Program of
Production of Motors and Motor Vehicles during the Developing Phase of Yugoslav Automobile Industry, 19561965], Belgrade, 1955, 1-2.
238
)DXUL³The Role of Fiat«´)LDWZDVDFWXDOO\XQDEOHto rely on other Italian suppliers. The effects of this
kind of adaptation of the Italian model to the Yugoslav environment will be treated in details in the following subchapter .
76
producer in the country, it shows the intensity of the frantic race between factories and
UHSXEOLFVWRH[SORLWWKHSRVVLELOLW\RIWKH³ILUVWPRYHUDGYDQWDJH´DQGWRSRVLWLRQWKHPVHOYHVDV
leaders in various industrial sectors in the country.
All of this seems to be evident from the analysis of the development of the production
in the Crvena Zastava factory, which was rapidly expanding the volume and diversity of its
program. In the original contract with Fiat signed on August 14, 1954 for the next 10 years, the
production of 1,500 off-road vehicles, 1,500 light commercial trucks, and 7,000 passenger
automobiles per year was estimated as adequate for the Yugoslav market. 239 Already in 1956,
PDQDJLQJGLUHFWRU3UYRVODY5DNRYLüQHJRWLDWHGWKHH[WHQVLRQRIWKHH[LVWLQJFRQWUDFWZLWK)LDW
to include its top selling modeO VPDOO DQG HFRQRPLF IDPLO\ DXWRPRELOH ³)LDW ´ PRUH
suitable for the Yugoslav standard and, according to his own words, to avoid mass layoffs,
since the existing program could not effectively employ the existing workforce in the factory.
The introduction of a new model necessitated the first small investment program for the
H[SDQVLRQRIWKHIDFWRU\¶VFDSDFLWLHVDQGSURFXUHPHQWRIQHFHVVDU\PDFKLQHU\<HWLWZDVVWLOO
very shy investment since the capacity of production was to be expanded from the initial
10,000 to only 12,000 vehicles per year.240 +RZHYHU LW VHHPV PRUH OLNHO\ WKDW 5DNRYLü ZDV
aware of the growing potential of Yugoslav market and wanted to exploit this fact. In the 19531957 period Yugoslavia experienced average growth of gross material product (GMP) of 10.2
percent per year, which was one of the highest in the world.241 This was translated into the rise
of the living standard and in 1957 personal consumption on average rose by 11.4 percent
239
AJ, 589 SSI, 107. Pregled potreba perspektivne proizvodnje lakih automobla u predu]HüX ³&UYHQD =DVWDYD´
.UDJXMHYDF >$Q 2YHUYLHZ RI WKH 3HUVSHFWLYH 3URGXFWLRQ RI /LJKW 9HKLFOHV LQ WKH ³&UYHQD =DVWDYD´ &RPSDQ\@
July 10, 1954.
240
-DQNRYLü
241
3OHãWLQD
77
compared to the previous year.242 :LWKKHOSIURPWKH)LDWH[SHUWVDOUHDG\LQ5DNRYLü
proposed another project for the completely new factory for the capacity of 32,000 vehicles per
year. Importantly, according to this project, previous plan for the production of 12,000 was to
EH H[WHQGHG E\ DQRWKHU ³)LDW ´ YHKLFOHV DW WKLV SRLQW UHQDPHG WR ³=DVWDYD ´
which were to be produced in the new facilities.243
However, the government resistance was immense. First of all, the majority of the
Yugoslav officials did not see the need for a new factory with this capacity, especially since in
YXJRVODYLDWRWDOQXPEHURIUHJLVWHUHGYHKLFOHVLQZDVRQO\DQGWKHJRYHUQPHQW¶V
plans and predictions were based not on the world market development, but on previous
Yugoslav experience.244 Some of them even held the opinion that Fiat automobiles DUH³VPDOO
DQGZHDN´DQGZHUHDUJXLQJWKDWWKHDJUHHPHQWZLWK³0HUFHGHV´ZRXOGKDYHEHHQPXFKEHWWHU
option.245
Leaving aside the longings of Yugoslav communists for luxury Western automobiles,
internal strife among the LCY leadership was also present. Even though the sources do not
clarify what was going on behind the scenes, there is enough evidence to support the claim that
the project for a new factory in Kragujevac was being sabotaged institutionally. The project for
the new factory was eventually approved but without any funding, and it was left for the
Crvena Zastava factory management to find a way to finance it. 246 When the Italian partner
242
$- 66, 5D]YRM OLþQH SRWURãQMH L åLYRWQRJ VWDQGDUGD >3HUVRQDO &RQVXmption and Living Standard
Growth], June 19, 1958.
243
$-66,(ODERUDW]DQRYXIDEULNXDWXRPRELOD³&UYHQD=DVWDYD´ ± Kragujevac [The Study for a New
Automobile Factory], June 19, 1958.
244
6WDWLVWLþNL JRGLãQMDN )HGHUDWLYQH 1DURGQH 5HSXEOLNH -XJRVOD vije, 1958 [Statistical Yearbook of Federal
3HRSOH¶V 5HSXEOLF RI <XJRVODYLD @ %HOJUDGH $- 66, Ä3URJUDP SURL]YRGQMH X]DMDPQLK
RGQRVDNRRSHUDFLMHLSRWUHEQLKLQYHVWLFLMDSURL]YRÿDþDPRWRUDLPRWRUQLKYR]LOD-XJRVODYLMHXUD]YRMQRPSHUiodu
motorne industrije od 1956. do 1965. [Program of Production of Motors and Motor Vehicles during the
Developing Phase of Yugoslav Automobile industry, 1956-1965], Belgrade, 1955.
245
-DQNRYLü,QWHUYLHZZLWK0LMDONR7RGRURYLüJLYHQLQ
246
Ibid., 50. The Yugoslav Second Five-Year Plan started to be implemented in 1957.
78
DJUHHG WR SURYLGH JHQHURXV ORDQ 3UYRVODY 5DNRYLü ZDV QRW DOORZHG WR SDUWLFLSDWH LQ WKH
negotiations with Fiat in Turin, many strings were pulled to include him in the official
delegation.247 5DNRYLü
V VWRULHV RI RWKHU VDERWDJHV E\ WKH RIILFLDO LQVWLWXWLRQV PD\ KDYH EHHQ
exaggerated, but archival documents confirm that his name was only later added to the
GHOHJDWLRQ¶Vlist of the Yugoslav government for the negotiations in Italy.248
After more than six months of negotiations and a lot more time spent in the preparation
of the project, the construction of the new Crvena Zastava factory started in April 1960; the
factory was finally opened in June 1962. But instead for the capacity of 32,000 the basic
facilities were constructed to accommodate the machines and workers for the capacity of
82,000, even though the equipment was procured for the initially designed lower production
volume.249 7KURXJKRXWWKHVHQHJRWLDWLRQVDQGWKHFRQVWUXFWLRQRIWKHQHZIDFWRU\5DNRYLüKDG
IXOO VXSSRUW IURP 7RGRURYLü ZKR ZDV QRW RQO\ UHVROYLQJ WKH GD\-to-day obstacles, but was
FRQVWDQWO\ VXSSRUWLQJ WKH H[SDQVLRQ RI WKH SURGXFWLRQ FODLPLQJ WKDW ³Lt is not the State that
EXLOGV DQG GHYHORSV EXW VPDUW DQG EUDYH SHRSOH´250 Finally, according to the memories of
0RPLU =HþHYLü ZKR ZDV FKDUJHG ZLWK LQVWDOOLQJ WHFKQLFDO HTXLSPHQW LQ WKH QHZ IDFWRU\
GXULQJRQHRIKLV PDQ\ YLVLWV WR .UDJXMHYDF7RGRURYLüH[pressed his delight that everything
ZDV³RUJDQL]HGRQFRQWHPSRUDU\HQJLQHHULQJSULQFLSOHVRIPRGHUQLQGXVWULDOSURGXFWLRQ´DQG
WKDWQHZWHFKQLFDOVROXWLRQVFDQEHHQDOVRXVHGIRUSURGXFWLRQRIQHZW\SHVRIZHDSRQU\³<RX
made a great contribution to the Institute, and you probably do not realize this, but we from the
VLGHVHHLW´251
247
-DQNRYLü,QWHUYLHZZLWK3UYRVODY5DNRYLüJLYHQLQ
$- IXQG 6DYH]QR L]YUãQR YHüH >)HGHUDO ([HFXWLYH &RXQFLO@ ILOH DUFKLYDO XQLW -159 (in
further reference AJ, 130 SIV, 622-1028/157-159) List of Yugoslav delegation for the negotiations in Italy, January
1957.
249
-DQNRYLü-63.
250
,ELG,QWHUYLHZZLWK0LMDONR7RGRURYLüJLYHQLQ
251
=HþHYLü
248
79
The development of the automobile industry in Yugoslavia with the Crvena Zastava
factory leading this sector was an important state project. Within a framework of less than ten
years, the former armament factory with outdated technology and without proper production
program became one of the most advanced industrial facilities in the country. However, from
what has been stated so far, it seems evident that this was achieved by just a few people able to
understand both the internal and international delicate political situation of Yugoslavia and who
at the same time were in a good position to steer the economic development of the country
accordingly. On the other hand, this development created much resistance among the party
leadership of other republics, who basically wanted to do the same thing in their republic, thus
creating divisions which were only growing larger as Crvena Zastava and other companies
expanded production capacities. Finally, even though not enough evidence is available, the fact
that the project started in a military factory, supported by high ranking military or at least
former military executives and state officials, makes it likely that the potential of the civilian
industry, especially with advanced Western technology for eventuall use in the military
industry was also a factor in the industrial expansion.
3URGXFLQJDQ$XWRPRELOHLQ<XJRVODYLD7KH³*UHDW´&KDQJHDQGLWV&RQWUDGLFWLRQV
In a situation where these individually-based international legal and economic
relationships are inevitably reflected on the community and its overall economic relationships
and interests, the introduction of a tighter social and public control cannot be in contradiction
with democratization or decentralization or the principle of self-management in economy since
otherwise elements of disharmony would be introduced in the entire economic policy and
finally in our policy of directing industrial development.252
252
AJ, 589 SSI, 296. The Analysis of Registered Contracts, 69-70.
80
This conclusion of an extended analysis of the Yugoslav FEC on the problems arising
from the 1950s widespread practice of using foreign licenses in order to start a factory, or to
modernize the existing industrial facilities, suggests that the rapid development based on the
cooperation with technically advanced partners from the West in practice was difficult to
achieve. Largely pushed by the American administration and its Western European partners to
modernize its economy and make it more competitive in the world market (see chapter 3.2) and
with the need to prove the correctness of the decision to embark on a separate road to
communism after 1948, Yugoslav authorities eventually reformed the political system and
HFRQRP\RQWKHSULQFLSOHVRI³GHPRFUDWL]DWLRQ´³GHFHQWUDOL]DWLRQ´DQG³GHEXUHDXFUDWL]DWLRQ´
WKH IDPRXV ³WKUHH '¶V´ DV WKH\ FRQVWDQWO\ UHPLQGHG WKHPVHOYHV DV ZHOO DV IRUHLJQ DQG
domestic public.253
From the Yugoslav top-down economic perspective, this meant that the companies were
gradually introduced to basic principles of market economy, having the relative freedom in
organizing and choosing their production program and being stimulated to create profitable
projects in order to compete on equal terms with other companies for state funding. Yet in
reality this strategy made the whole system more susceptible to the political pressure of local
and regional Party leaders.
At the factory level, this reform meant the introduction of the Yugoslav concept of selfmanagement of the factories. The system was based on the theoretical assumption that
³VRFLDOLVPFDQJURZRQO\WKURXJKLQLWLDWLYHRIPLOOLRQVDQGZLWKSURSHUOHDGHUVKLSUROHRIWKH
SUROHWDULDQ 3DUW\´ DQG WKDW WKH RQO\ URDG WR DFKLHYH WKLV JRDO LV ³WKH FRQVWDQW GHHSHQLQJ RI
socialist democracy through expansion of the self-management of the masses, in terms of their
253
'XãDQ %LODQGåLü Hrvatska moderna povijest [Croatian Modern History] (Zagreb: Golden Marketing, 1999),
334.
81
LQFUHDVHG SDUWLFLSDWLRQ LQ WKH ZRUN RI WKH VWDWH PDFKLQHU\´254 In practice, self-management
PHDQW ³LQGHSHQGHQW GHFLVLRQ PDNLQJ RI WKH PRVW EDVLF HFRQRPLF GHFLVLRQ´ LQ RQH FRPSDQ\
decisions about the production; sales and finances; transactions with foreign partners; prices
formation; investments; employment; appointment of managers; division of profit and internal
organization.255
However, while these ideas sounded very new and progressive, their implementation
was a different story since self-management was from the start practically impossible to operate
successfully due to inherent contradictions of the Yugoslav state system. The political system
EDVHGRQD³YHUWLFDOVXERUGLQDWLRQ´RU³SROLWLFDO PRQRSRO\´ZDVLPSRVVLEOHWRUHFRQFLOHZLWK
the self-PDQDJHPHQW V\VWHP ZKLFK ³DOORZV VKDWWHULQJ RI WKH FRQFHQWUDWLRQ RI HFRQRPLF
SRZHU´256 7KHUHIRUH ULJKW IURP WKH VWDUW DOO RI WKH ³WKUHH '¶V´ RI <XJRVODY UHIRUPV RQO\
hampered further economic development of the country.
These contradictions are evident in even a brief description of the most important
features of the Yugoslav economic system to which Western (Italian) technology, which was
designed, tested and practiced in a capitalist economy, had to be adapted. On the first level, the
most visible was the question of horizontal integration of production, instead of vertical as was
the case in Fiat and the American factories at that period (see chapter 3.3). This meant that in
practice all of Yugoslav republics had to share at least some of the profits and successes of the
Crvena Zastava factory. This strategy was based on a political or even an ideological rationale,
and consequently had a negative impact on the economic performance of the Crvena Zastava
factory. TKH XQGHUO\LQJ LGHD ZDV WKH FRQFHSW RI ³%URWKHUKRRG DQG 8QLW\´ ZKLFK ZDV
254
'XãDQ %LODQGåLü Kratak pregled razvoja sa moupravljanja u Jugoslaviji [A Short Overview of the
Development of Self-ManagemHQWLQ<XJRVODYLD@6SOLW0DUNVLVWLþNLFHQWDU
255
Branko Horvat, ABC jugoslavenskog socijalizma >$%&¶VRI<XJRVODY6RFLDOLVP@=DJUHE*OREXV
The impact, reach and influence of the self-management system on the daily operations within a factory will be
GLVFXVVHGLQFKDSWHUEDVHGRQWKH³ Crvena Zastava ´FDVHVWXG\
256
Horvat, 11.
82
RSHUDWLRQDOL]HGWKURXJK³WKHSULQFLSOHHVWDEOLVKLQJHWKQLFTXRWDVIRUSRVLWLRQVRIUHVSRQVLELOLW\
RQWKHEDVLVRIDSSUR[LPDWHSURSRUWLRQDOLW\WRSRSXODWLRQ´257
7KLV³HWKQLFNH\´ZDVHYLdent already in the original 1954 contract between Fiat and the
Crvena Zastava factory in which the main Yugoslav component suppliers were dispersed all
over the country, despite their distance to Kragujevac: from Belgrade (141 km), Banja Luka
(467 km; Bosnia and Herzegovina), Kranj (699 km; Slovenia), Borovo (302 km; Croatia) and
Zagreb (529 km; Croatia).258 By the early 1960s the Crvena Zastava factory could boast a vast
network of component suppliers which rose to sixty-three big Yugoslav industrial enterprises,
but in reality their dispersal all over the country, produced constant logistical problems in
supplying components.259 Even in instances when Crvena Zastava was in a position to invest its
own funds in the establishment of the component supplier, the state always intervened and
directed those investments into less developed areas of Yugoslavia, usually in the Southern
Serbian province of Kosovo or the Republic of Macedonia where poor infrastructure and
inadequate workforce contributed to much lower overall performance than expected.260
)XUWKHUPRUHWKHJUHDWPDMRULW\RIWKH&UYHQD=DVWDYD¶VFRPSRQHQWVXSSOLHUV¶FRQVLGHUHGWKHLU
production for the automobile industry only as a supplementary program. Consequently, they
257
Sabrina P. Ramet, The Three Yugoslavias: State-Building and Legitimation, 1918-2005 (Washington D.C.:
Woodrow Wilson Center Press, 2006), xxi.
258
AJ, 566,3UHJOHGSRWUHED SHUVSHNWLYQHSURL]YRGQMHODNLKDXWRPREODXSUHGX]HüX³ Crvena Zastava ´
.UDJXMHYDF >$Q 2YHUYLHZ RI WKH 3HUVSHFWLYH 3URGXFWLRQ RI /LJKW9HKLFOHV LQ WKH ³ Crvena Zastava ´ &RPSDQ\@
July 10, 1954. Road distances were obtained from the Google internet site service ± Google Maps
(http://maps.google.com/) and are relative, yet still trustworthy since the existing road network was modernized
since the 1950s, but on the same routes. Please refer also to Appendix 1 for a Yugoslav map.
259
HU Open Society Archives, fond 300 Records of Radio Free Europe/Radio Liberty Research Institute, 19491994, subfond 10 Balkan Section: Albanian and Yugoslav Files, series 2 Yugoslav Subject Files I, Box 277 (in
further reference HU-300-10-2, 277). Ekonomska Politika (in further reference EP ), November 9, 1963. Interview
ZLWK3UYRVODY5DNRYLFGLUHFWRURIWKH³ Zavodi &UYHQD=DVWDYD´.
260
0LFKDHO 3DODLUHW ³5DPL] 6DGLNX$ &DVH 6WXG\ LQ WKH ,QGXVWULDOL]DWLRQ RI .RVRYR´ Soviet Studies 44, no. 5
(1992), 900-901. Detailed and very informative analysis of the Yugoslav policies of regional development was
FRQGXFWHGE\'LMDQD3OHãWLQD Regional Development in Communist Yugoslavia (Boulder, San Francisco, Oxford:
Westview Press, 1992).
83
were not inclined to invest heavily in expensive equipment, but rather opted to continue
production of the components with the existing machinery.261
This is important notion since it shows the difficulties of adaptation of a Western model
of automobile production to a socialist economic and political system. According to the
provisions in the original contract between Crvena Zastava and Fiat, the model of production in
the Yugoslav factory was based on the Fordism principles, where the central factory is
basically just an assembly line, with most of the components being provided by the
cooperators. According to the plan of the development of production in the new factory, opened
in 1962, 55% of the components should be produced in the Crvena Zastava, 40% in other
Yugoslav factories, and only 5% were to be imported. Heavily reliant on the component
VXSSOLHUV¶ SHUIRUPDQFH DQG ZLWKRXW DQ\ RWKHU ZD\ WR HQWLFH WKHP WR RSHUDWH PRUH HIILFLHQWO\
other than shear political pressure, the whole system necessarily became highly politicized and
prone to influences of various high ranking politicians.262
The problems of the Crvena Zastava factory in obtaining adequate volume and quality
of automobile tires from Yugoslav factories provide a telling example.263 With the new factory
already setup and running by the end of 1962, the problem of tire supply for the top-selling
Zastava 600 model soon emerged, since none of the three Yugoslav factories could keep up
ZLWK&UYHQD=DVWDYD¶VGHPDQG%HLQJRQO\VXSSOHPHQWDU\WRWKHLURWKHUSURGXFWLRQSURJUDPV
these factories were not producing tires in great numbers, hence, their products were more
expensive even than imported tires. However, due to political pressure, it was not possible to
261
0LFKDHO 3DODLUHW ³5DPL] 6DGLNX$ &DVH 6WXG\ LQ WKH ,QGXVWULDOL]DWLRQ RI .RVRYR´ Soviet Studies 44, no. 5
(1992), 900. HU OSA 300-10-2, 277. EP 1RYHPEHU ,QWHUYLHZ ZLWK 3UYRVODY 5DNRYLü GLUHFWRU RI WKH
Crvena Zastava
262
³=DRYXID]XRVYDMDQMDGRYROMQD´>,Q7KLV3KDVHWKH3URGXFWLRQ/HYHOLV6XIILFLHnt], Crvena Zastava , no. 42
(February 1962), 4.
263
7KHIROORZLQJSDUDJUDSKLVEDVHGRQWKH3UYRVODY5DNRYLü¶VLQWHUYLHZJLYHQWR EP on November 9, 1963, and
the conclusions and explanations given in my previous sub-chapter.
84
LPSRUW IRUHLJQ WLUHV )XUWKHUPRUH HYHQ WKRXJK &UYHQD =DVWDYD¶V PDQDJLQJ GLUHFWRU 3UYRVlav
5DNRYLüZDVUHSHDWHGO\DQGSXEOLFO\FDOOLQJIRURQHRIWKH<XJRVODYWLUHIDFWRULHVWRVSHFLDOL]H
its program exclusively for the automobile industry, this necessitated a lot of investment. Yet,
these investments were never approved, since the remaining tire producers would have to be
HTXDOO\DFFRPPRGDWHG)LQDOO\GXULQJWKHV³SROLWLFDO´IDFWRULHVPXVKURRPHGDOORIIHUWKH
country (see chapter 3.3), which as a consequence usually meant the multiplication of factories
with basically the same production program. Combined with inter-regional competitiveness, it
is not surprising that the existing three tire factories were located in Slovenia, Croatia and
6HUELDDFFRUGLQJWRWKH³HWKQLFNH\´DOORIWKHPKDGWRHQMR\LQWKHSURGXFWLRQDQGSURILWRI
Crvena Zastava.
Conversely, exactly because of this kind of protection, Crvena Zastava component
suppliers were discouraged to invest their own funds into modernization and expansion of their
capacities, since purchase of their products was guaranteed, thus enabling them to act as
PRQRSROLVWV7KH³HWKQLFNH\´SULQFLSOHZDVSXUVXHGHYHQWRWKHOHYHORf utter banality which is
YLVLEOH HYHQ LQ 5DNRYLü¶V LQWHUYLHZ LQ ZKLFK KH ZDV KLJKO\ FULWLFDO RQ WKH PDMRULW\ RI
FRPSRQHQWVXSSOLHUV¶SHUIRUPDQFH \HWKHGLGQRWIDLOWRPHQWLRQWKDW³>W@KH6ORYHQHVDUHWKH
quickest in attaining the necessary volume aQG TXDOLW\ RI SURGXFWLRQ´ EXW WKDW WKH &UYHQD
=DVWDYDKDG³JRRGH[SHULHQFHZLWKVRPHHQWHUSULVHVLQ6HUELD&URDWLDDQG%RVQLD´EDVLFDOO\
FRYHULQJWKHSROLWLFDOPDSRIWKHIDFWRU\¶VVXSSOLHUV264
All of these problems were eventually funneled directly to the Crvena Zastava factory.
(YHQWKRXJKWKHIDFWRU\¶VPDQDJHPHQWZDVREYLRXVO\DZDUHRIWKHSUREOHPV DQGHYHQNQHZ
how to mend them, their hands were quite literally tied. Supply problems, in terms of volume,
264
HU OSA 300-10-2, 277. EP 1RYHPEHU,QWHUYLHZ ZLWK3UYRVODY5DNRYLü PDQDJLQJGLUHFWRURIWKH
³ Crvena Zastava ´.
85
quality and logistics, caused stoppages on the Crvena Zastava assembly line, thus raising the
costs of production.265 These costs could not be translated to higher prices of automobiles, since
they had to be kept preferably on lower level than in Italy, even though the costs of production
in Yugoslavia were much higher. They could not be translated into lower salaries either, since
in the self-PDQDJHPHQW V\VWHP ZRUNHUV¶ FRXQFLOV FRXOG VWRS VXFK GHFLVLRQ $V D ILQDO
FRQVHTXHQFH &UYHQD =DVWDYD¶V SURILW PDUJLQ JUHZ HYHU WKLQQHU ZKLFK PHDQW WKDW HYHQ WKH
existing level of production was very difficult to finance.
These costs were eventually paid through the mechanism of deficit spending and by the
local Yugoslav customers who were discouraged to buy foreign automobiles through import
duties which varied in a range of 12-100% depending on the vehicle model.266 At the same
time, due to many already mentioned problems, Yugoslav automobiles were poorly made. Even
though the daily press and even archival material is generally silent on this problem, reports on
the performance of Yugoslav automobiles in the foreign market are instructive. In the 1961
Brno exhibition Yugoslav cars were ridiculed by visitors for their poor paintjob and
craftsmanship ± the paint was applied unequally, and was even chipped in some areas, while
the gap between the headlight and the body panel was wide enough for visitors to put their
fingers through it. Adding insult to injury, Yugoslav automobiles were estimated by the
Czechoslovak visitors as being of lower quality even than other East European automobiles.267
While this could be attributed to Eastern bloc propaganda, these were not small details, but
huge problems and were eventually confirmed by the Yugoslav delegates.
265
HU OSA 300-10-2, 277. EP 1RYHPEHU,QWHUYLHZ ZLWK3UYRVODY5DNRYLü PDQDJLQJGLUHFWRURIWKe
³ Crvena Zastava ´.
266
HU OSA 300-10-2, 277. EP 1RYHPEHU,QWHUYLHZ ZLWK3UYRVODY5DNRYLü PDQDJLQJGLUHFWRURIWKH
³ Crvena Zastava ´; HU OSA 300-10-2, 277. Borba, October 28, 1966, 5.
267
AJ, 253, UPMMV, 25. Report of Yugoslav delegate on Brno Fair, September 3, 1961, 1.
86
The report of the 1962 export deal with Finland reveals how problems in cooperation
with other Yugoslav companies undermined the Crvena Zastava performance on the West
European market. For the purposes of conserving the paintjob on vehicles during the sea
transport from Yugoslavia to Finland, a preservation material produced in Yugoslavia was
used. However, both Finish and Yugoslav technicians in Finland found it impossible to remove
this material from the majority of the automobiles, which eventually had to be repainted at a
price of 100$ per vehicle. Needles to say, these costs were paid by the Crvena Zastava factory
in order to secure the export deal, while at the same time the Yugoslav factory which provided
the preservation material never reimbursed these costs.268
Finally, the important question to answer is in what way the Western (Italian)
technology influenced the development of the Yugoslav socialist industry and economy in
JHQHUDO$JDLQ5DNRYLü¶VHVWLPDWLRQVDUHLQVWUXFWLYH
³+HUH ZH FRPH DFURVV PDQ\ REVWDFOHV :H XVXDOO\ VD\ WKDW VL[W\-three enterprises
compose our auxiliary industry. This is only partly true. Every one of our cooperators relies,
usually, on another twenty odd cooperators of his own, so that in the end it seems that almost
DOO RI <XJRVODYLD¶V LQGXVWU\ LV FRQQHFWHG ZLWK WKH SURGXFWLRQ RI DXWRmobiles, for there are
about 1,200 of them which are. That is why I can freely claim that the problems of an
automobile industry are just as much problems of the entire industry, problems of the national
economy ± in our country or in any other country. Unfortunately, this simple truth has not yet
EHHQIXOO\JUDVSHGHYHU\ZKHUHLQRXUFRXQWU\´269
While the problems of supply in a classical socialist system, as explained and defined
E\.RUQDL¶VWHUP³VKRUWDJHHFRQRP\´DUHH[SHFWHGDQGLQGHHGLQWHJUDOSDUWWR system, it seems
that in Yugoslavia this problem was further exacerbated by the introduction of both market
268
Centralna arhiva Zavoda Crvena Zastava, Upravni odbor Zavoda [Central Archive of the Red Flag Institute,
Executive Board], file 165/2, year 1962 (in further reference ZCZ, UOZ, 165/2, 1962). Letter of the Executive
Board to the ManDJLQJ'LUHFWRU3UYRVODY5DNRYLü-XO\
269
HU OSA 300-10-2, 277. EP 1RYHPEHU,QWHUYLHZ ZLWK3UYRVODY5DNRYLü PDQDJLQJGLUHFWRURIWKH
³ Crvena Zastava ´.
87
economy principles and the self-PDQDJHPHQW V\VWHP 7KLV NLQG RI ³GHFHQWUDOL]DWLRQ´
³GHPRFUDWL]DWLRQ´ DQG ³GHEXUHDXFUDWL]DWLRQ´ DFWXDOO\ FUHDWHG WKe problem of simultaneous
existence of powerful, contradictory and in some instances mutually exclusive agents and
strategies of the economic development. Polarized in this way, the Yugoslav economic system
achieved a little bit of everything. In the case of the automobile industry, the Crvena Zastava
factory was eventually able to produce modern vehicles, even relatively competitive on the
West European market, but at the same time, of equal or even lower quality than factories in
other East European countries. In this kind of almost schizophrenic situation all levels of
society could at the same time boast of their successes, and call for the serious reform of the
entire system.
88
I V Inside the A utomobile F actory: Y ugoslav Wor kers and W estern
T echnology
According to the official history, on August 26, 1953, 94 % of roughly 5,000 workers of
WKH&UYHQD=DVWDYDIDFWRU\GHFLGHGRQWKHUHIHUHQGXPKHOGRQRQHRIWKHZRUNHUV¶FRXQFLOVWR
change the existing program of weapons and ammunition production and to start the production
of passenger automobiles. For this purpose, the workers also decided not to use the existing
fund of 100,000.000 dinars as an addition to their salaries, which they were legally allowed to,
but instead to invest these funds in adaptation of one of the factory workshops for automobile
production.270
This event also had symbolical significance since it marked the new birth of the factory
in the year of its centenary and was captured and engraved on the memorial plaque which until
the very recent years was proudly mounted on the main building of the Crvena Zastava
factory.271 Starting with the group of pre-war gunsmiths and other craftsmen, with very few
educated technicians and engineers, the Crvena Zastava workforce was by 1962 expanded,
rejuvenated and successfully transformed to become able to successfully operate one of the
technically most advanced automobile factories in Europe.
In this chapter, my analysis will focus on the impact the advanced Western technology
had in the process of creation of the workforce in the Crvena Zastava factory. Organization of
work was based on the two distinctive models which had to be implemented simultaneously:
Yugoslav self-management as a part of the entire political system, and Western technocratic
270
Od topa do automobila, 1853-1973, 52-57;
The memorial plaque is taken off when Fiat company bought the factory in 2008, and is now kept in the office
RI WKH VWLOO IRUPDOO\ H[LVWLQJ ³=DVWDYD $XWRPRELOL´ WKH ³&UYHQD =DVWDYD´ VXFFHVVRU FRPSDQ\ WKH SODTXH ZDV
VKRZQWRPHE\WKHPDQDJLQJGLUHFWRURIWKHFRPSDQ\5DGRPLU3HWURYLüGXULQJ my visit to Kragujevac in April
2013.
271
89
thinking originating from capitalistic system. I will argue that the implementation of advanced
Western technology acted as a catalyst in the process of creation of new and technically more
educated workforce, but that new system of organization of production was in a constant
FROOLVLRQ ZLWK <XJRVODY FRQFHSW RI ZRUNHUV¶ VHOI-management of factories. This collision
XQGHUPLQHGWKH3DUW\¶VSURMHFWRIJHQHUDWLQJSROLWLFDOVXSSRUWIRUWKH<XJRVODYSROLWLFDOV\VWHP
among the workforce, and at the same time created a rift in the Party itself between political
GHFLVLRQ PDNHUV DQG IDFWRU\¶V PDQDJHPHQW VWUXFWXUHV SUHVVXUHG WR VXSSRUW 3DUW\¶V SROLWLFDO
program and at the same time to achieve adequate economic performance of the factory.
Understanding the factory as a microcosm of the entire Yugoslav society, this analysis will
DOORZPHWRGUDZVRPHLPSRUWDQWFRQFOXVLRQVDERXWWKHQDWXUHRIWKH<XJRVODY³LQGHSHQGHQW´
road to communism.
4.1 Workers Decide Everything: The Decision Making in the Crvena Zastava F actory
³,I for some idealistic reasons we want to introduce democracy in the decision-making,
then >«@WKLVmeans compromise; the more democracy, the less efficiency and vice versa >«@
therefore, the socialist principle of organization will not be based on a trade-off between
participation in decision-making and efficiency, but rather on maximization of democracy with
PD[LPL]DWLRQRIHIILFLHQF\+RZWRDFKLHYHWKLV"´272
The problem of implementing the ambitious system of self-management expressed by
one of the Yugoslav most respected economists was only part of his treatise published in the
late 1980s in which he tried to defend the Yugoslav system of decision-making and managing
LQ WKH FRPSDQLHV DQG IDFWRULHV ZKLFK ZDV DFFRUGLQJ WR KLV RZQ ZRUGV ³WKURXJK SROitical
YXOJDUL]DWLRQ´EURXJKW³RQWKHEULQNRIGLVFUHGLWLQJ´273 This was the basic backdrop to which
272
273
Horvat, 20-21.
Ibid., 25.
90
the Western technology had to be adapted and eventually implemented. In order to fully
comprehend how the whole project of cooperation with Fiat was implemented, adapted and
how it evolved on the factory level, it is first necessary to understand the dynamics of the
decision making inside the factory and how suitable it was for the implementation of the
modern technology. Conversely, it would be also important to analyze in what way the decision
making process was influenced by the new technology.
7KHSUHYLRXVVWRU\DERXWWKH&UYHQD=DVWDYDZRUNHUV¶GHFLVLRQWRVWDUWWKHDXWRPRELOH
production program seems to suggest how democratic the system was 274 ± it shows that the
workers were allowed to speak their mind, with some of them arguing and voting freely against
the program of automobile production. It also seems to show high level of unity among the
workers, in spite of their unavoidable differences in education, age, sex or origin, while on a
deeper level it suggests that the whole newly established political, social and economic system
had support of the workers. But were the voters the actual decision makers? The easiest answer
is no.
The decision making inside the factory was formally based on the Yugoslav concept of
self-management of the factories, first introduced in the country already in the late 1949, and
HPERGLHGLQWKHDPELWLRXVVORJDQ³IDFWRULHVWRWKHZRUNHUV´7KHILUVWZRUNHUV¶FRXQFLOLQWKH
Crvena Zastava factory was elected already in February 1950 and it constituted of 80, out of
5,000 workers employed in the factory.275 2Q WKH RWKHU KDQG ³GXH WR WKH VSHFLILFLWLHV RI WKH
PLOLWDU\LQGXVWU\´ZKLFKLQFOXGHGWKH&UYHQD=DVWDYDIDFWRU\EHIRUHWKHVWDUt of the production
RIDXWRPRELOHVLQWKHZRUNHUV¶FRXQFLOIRUWKHILUVWFRXSOHRI\HDUVKDGRQO\DQDGYLVRU\
274
+RUYDWH[SODLQVWKHWHUP³GHPRFUDF\´LQWKHVHOI-management system not as decision making by the majority,
EXWDV³UHVSHFWRIWKHULJKWVRIWKHPLQRULW\´DFKLHYHGWKURXJKPXOWLOHYHOHd decision making system decentralized
WR WKH OHYHO WKDW HDFK ZRUNHUV¶ XQLW LV JUHDWO\ KRPRJHQL]HG DV D JURXS RI ZRUNHUV ZLWK HTXDO WDVNV WKHUHIRUH
avoiding the discrimination by majority. Horvat, 21. For the short analysis of the basic principles of the Yugoslav
self-management, please refer to the opening analysis of the chapter 3.4.
275
-DQNRYLü, 32.
91
function. It began making decisions in 1952 with the first reform of the self-management
system which allowed it higher autonomy in managing RIWKHIDFWRU\¶VLQFRPH276
The system was gradually evolving both on the state level and in the factories,
EHFRPLQJLQFUHDVLQJO\EXUHDXFUDWL]HG,QWKH&UYHQD=DVWDYDIDFWRU\WKH³ZRUNVKRSFRXQFLO´
was introduced in 1956 as an ancillary and advisory body RIWKHZRUNHU¶VFRXQFLOSURYLGLQJLW
with the information on the problems at the shop-floor level. And in a good practice of highly
bureaucratized systems, the coordinating body between these two councils was also created
with a complicated division of jXULVGLFWLRQEHWZHHQWKHZRUNHUV¶DQGZRUNVKRSFRXQFLOV 277 In
the following years, even these bodies were further multiplied and divided into several sectors
± financial, sales, personnel and other specialized sectors, which also held their own separate
councils.278
Another important characteristic of the formal side of the decision making system in the
IDFWRU\ZDVWKHKLJKIOXFWXDWLRQRIZRUNHUVZKRZHUHFKRVHQDVUHSUHVHQWDWLYHVLQWKHZRUNHUV¶
and other councils. By 1961, after almost ten years of practice LQ WKH ZRUNHUV¶ VHOImanagement, one fifth of all the workers had passed at one point or another through the
³RIILFHV RI WKH ZRUNHUV¶ VHOI-management, deciding on the most important questions in the
IDFWRU\´279
All these changes and the actual result of their implementation can be contrasted with
WKHRIILFLDOO\SURPRWHG³WKUHH'V´RIWKHFRQWLQXRXVUHIRUPVRIWKHVHOI-management system 276
Od topa do automobila, 1853-1973, 51. The word income was used with great amount of care, since only later
LQ GLG WKH PDQDJHPHQW RI ³LQFRPH´ EHFDPH PDQDJHPHQW RI WKH IDFWRU\¶V ³SURILW´ ,W LV DOVR LPSRUWDQW WR
stress that one part of the factory continued the armaments production to this very day; it became the independent
IDFWRU\ ZLWKLQ WKH ³&UYHQD =DVWDYD´ LQVWLWXWH LQ -65 period, but already in 1953 the armaments production
was considered to be additional to the automobile production and other civilian programs.
277
³'RQRãHQMH pravilnika o radu pogonskih UDGQLþNLK saveta´ >(QDFWPHQWRIWKH:RUNVKRS&RXQFLO¶V5XOH%RRN@
Crvena Zastava , no. 1, July 1958, 5.
278
³Prvi put u organima upravljanja´>)LUVW-Timers in the Management Offices], Crvena Zastava , no. 29, January
1961, 2.
279
³Izabran IDEULþNL komitet´>)DFWRU\¶V&RPPLWWHHLV&KRVHQ@ Crvena Zastava , no. 31, March 1961, 1.
92
democratization, debureaucratization and decentralization280 (see chapter 3.4). From what has
been said so far, the system was beyond any doubt highly bureaucratized, which at the same
time made any attempt for a decentralization of the decision making system, however honest it
may have been, into its opposite, the creation of several levels of (semi-)independent bodies
with overlapping jurisdictions within the factory. However, it can be argued that
democratization, understood in a Yugoslav self-management key, was one of the achieved
JRDOV %\ WKH RULJLQDO QXPEHU UHSUHVHQWDWLYHV LQ ZRUNHUV¶ FRXQFLO JUHZ WR LQ
diffHUHQW PDQDJHPHQW ERGLHV ZLWK DGGLWLRQDO UHSUHVHQWDWLYHV LQ WKH VPDOOHU ³HFRQRPLF
XQLWV´ZKLFKZHUHHOHFWHG\HDUO\DWWKHVDPHWLPHWKHZRUNIRUFHVL]HURXJKO\RQO\GRXEOHG 281
These numbers indeed are impressive, and explain how one fifth of the workforce, or around
1,600 workers, passed through the self-management system, but they do not tell the whole
story. Who were those workers?
:RUNHUV¶FRXQFLOVZHUHXQGHUWKHVWULFWFRQWURORIWKH/&<DQGZHUHLQHIIHFWLWVORQJ
arm, which is not surprising since the rationale behind the introduction of the self-management
project was primarily political. On a strictly formal level, the only official LCY body inside the
IDFWRU\ ZDV WKH IDFWRU\¶V FRPPLWWHH FRPSRVHG RI PHPEHUV IURP WKH HDFK VHFWRU IURP WKH
managing director himself and his closest associates, down to the ordinary workers.282 At the
VDPHWLPHWKHIDFWRU\¶VODERUXQLRQRUJDQL]DWLRQDVDQRIILFLDOO\LQGHSHQGHQWERG\ZDVDOVR
under the Party control and served as a coordinating body between the Party and the different
ZRUNHUV¶FRXQFLOVDQGPDQDJHPHQWERGLHV283 While the precise numbers of workers who were
280
%LODQGåLü Hrvatska moderna povijest, 334.
³Jedanaest godina UDGQLþNRJ upravljanja´ >(OHYHQ <HDUV RI :RUNers Management], Crvena zastava , no. 48,
April 1962, 1; Jankoviü, 183.
282
³6SURYRÿHQMH odluka VII kongresa saveza komunista´ >(QDFWPHQW RI WKH 'HFLVLRQV RI WKH 8QLRQ RI
Communists VII Congress], Crvena Zastava , no. 9, March 1959, 1.
283
³Aktuelni problemi i zadaci sindikalne organizacije SUHGX]Hüa´>&XUUHQW3UREOHPVDQG7DVNVRIWKH&RPSDQ\¶V
Labor Union Organization], Crvena Zastava , no. 1, July 1958, 1-2.
281
93
the LCY members are unavailable, some conclusions can be drawn from the analysis of the
QXPEHURIGHOHJDWHVSUHVHQWDWWKH/&<IDFWRU\¶VFRQJUHVVHV284
Between 1959 and 1961 the number of delegates rose from 200 to 600, while in the
same period the number of workers rose only from 7,542 to 8,030.285 This kind of disproportion
could suggest two things ± either the Party activism was becoming increasingly popular, or the
/&<¶VSHQHWUDWLRQLQWRWKHZRUNIRUFHKDGSLFNHGXSPRPHQWXP$WWKHVDPHWLPHWKHQXPEHU
RI ³GHOHJDWHV´ VXJJHVWV WKDW WKH DFWXDO QXPEHU RI WKH /&< PHPEHUV DPRQJ WKH ZRUNHUV
ZDV KLJKHU 2IILFLDO UHSRUWV IURP WKH /&< IDFWRU\¶V FRQJUHVV seem to point in this
direction. While the actual numbers are not revealed, it can be concluded, and in a very rough
estimate, that there were almost 2,000 Party members among the workers in the Crvena Zastava
factory.286 Data from 1959 also confirm that in this year 541 members of the LCY were
DFWLYHO\LQYROYHGDVFKRVHQUHSUHVHQWDWLYHVLQZRUNHUV¶RUJDQL]DWLRQVDQGWKDW³LWLVFHUWDLQWKDW
the number of comrades without elective functions working in the mass organizations is
KLJKHU´287 Compared to the estimaWHG ZRUNHUV WDNLQJ SDUW LQ WKH ZRUNHUV¶ VHOImanagement system, the conclusion that the great majority of them were the LCY members is
quite probable.
,Q IDFW DFFRUGLQJ WR WKRVH UHVROXWLRQV RI WKH /&< IDFWRU\¶V FRQJUHVVHV ZKLFK ZHUH
published in the IDFWRU\¶V QHZVSDSHUV WKHUH ZDV D FRQVWDQW GHPDQG IRU ³KLJKHU DQG PRUH
DFWLYHSDUWLFLSDWLRQRIWKH/&<PHPEHUVLQWKHERGLHVRIZRUNHUV¶DQGVRFLDOPDQDJHPHQWDV
284
:KDWFDQEHFRQFOXGHGIURPWKHIDFWRU\¶VSUHVVLVWKDWWKH/&<FRQJUHVVHVLQWKHIDFWRU\ZHUHRIILFLDOly held
yearly but also in instances of great changes on the factory level, for example, the expansion of capacities, etc.
Usually, there were at least two congresses per year.
285
³6SURYRÿHQMH odluka VII kongresa saveza komunista´ >(QDFWPHQW RI WKH 'HFLVLRQs of the Union of
Communists VII Congress], Crvena Zastava QR 0DUFK ³Izabran IDEULþNL komitet´ >)DFWRU\¶V
Committee is Chosen], Crvena Zastava , no. 31, March 1961, 1; Jankoviü, 183.
286
³âNRORYDWL kadrove´>(GXFDWHWKH&DGUHV@ Crvena Zastava , no. 22, February 1962, 2.
287
³-DþDWL odgovornost na prozvodnim zadacima´ >6WUHQJWKHQLQJ RI WKH 5HVSRQVLELOLW\ RQ 3URGXFWLYH
Assignments] , Crvena Zastava QR0DUFK7KHQHZVSDSHU¶VDUWLFOHLVUHIHUULQJWRWKHIDFWRU\¶V³PDVV
RUJDQL]DWLRQV´
94
ZHOODVIXUWKHUGHYHORSPHQWRIWKHZRUNTXDOLW\RIWKHVHERGLHV´ 288 Their task was also clearly
GHILQHG DV ³LQWHUSUHWDWLRQ´ RI WKH GHFLVLRQV GHOLYHUHG E\ WKH VWDWH RU WKH 3DUW\ DV D PHDQ
WKURXJK ZKLFK ³WLJKWHU DQG PRUH GLUHFW FRQQHFWLRQ´ EHWZHHQ WKH ZRUNHUV¶ FRXQFLOV DQG WKH
workers would be established.289
Putting all this into the framework of the everyday routine on the shop-floor level in the
Crvena Zastava factory, it becomes clearer that the main and constant task of the LCY was to
exert maximum control of the working class through any means possible, and the most obvious
choice was to do it WKURXJKWKHGLIIHUHQW ERGLHV RIWKHZRUNHUV¶VHOI-management system. As
PHQWLRQHGLQDDUWLFOHFRQVLGHULQJWKLVWRSLFWKH3DUW\UROHZDVWR³HQWLFHWKHZRUNHUVLQWR
PDQDJHPHQW´290 Furthermore, the system itself necessarily became more bureaucratized since
QHZ FRXQFLOV HVSHFLDOO\ WKRVH ZLWK ³FRRUGLQDWLYH´ UROH ZHUH FRQVWDQWO\ FUHDWHG :KLOH WKLV
OHYHORIWKH3DUW\¶VLQYROYHPHQWLVQRWWRRVXUSULVLQJWKHUHVXOWLVLQWULJXLQJVLQFHLWVHHPVWKDW
already by the early 1960s these policies backfired.
³7KHZLWKHULQJDZD\RIWKHVWDWH´DVDSROLF\ZKLFKLQVRFLDOLVW<XJRVODYLDZDVWREH
deliberately and actively pursued, showed signs of weakness already in the early 1960s since it
seems that neither the State nor the Party were willing to relinquish their monopoly of the
GHFLVLRQPDNLQJRQ DQ\ OHYHO WR WKHZRUNHUV1RUZHUHWKH\ZLOOLQJWR ³ZLWKHUDZD\´LQ DQ\
VHQVH 7KLV VHHPV WR EH WKH UHDVRQ ZK\ ³RQH SDUW RI WKH >3DUW\@ DFWLYLVWV DQG H[SHUW FDGUHV´
ZHUHDUJXLQJWKDWWKHZRUNHUVZHUHQRW³PDWXUHHQRXJKWo take the appropriate stand on one or
WKHRWKHULVVXH´291 7KHPHFKDQLVPRI³LQWHUSUHWDWLRQ´RIWKHVWDWHDQGWKH3DUW\GHFLVLRQVDOVR
288
³6SURYRÿHQMH odluka VII kongresa saveza komunista´ >(QDFWPHQW RI WKH 'HFLVLRQV RI WKH 8QLRQ RI
Communists VII Congress], Crvena Zastava , no. 9, March 1959, 1.
289
³6SURYRÿHQMH odluka VII kongresa saveza komunista´ >(QDFWPHQW RI WKH 'HFLVLRQV RI WKH 8QLRQ RI
Communists VII Congress], Crvena Zastava , no. 9, March 1959, 1.
290
³Dalji razvoj RGOXþLYDQMD neposrednih SURL]YRÿDþa´ >)XUWKHU 'HYHORSPHQW RI WKH 'HFLVLRQ 0DNLQJ RI WKH
Immediate Producers], Crvena Zastava , no. 41, January 1962, 3.
291
³Dalji razvoj RGOXþLYDnja neposrednih SURL]YRÿDþa´ >)XUWKHU 'HYHORSPHQW RI WKH 'HFLVLRQ 0DNLQJ RI WKH
95
GHJHQHUDWHGLQWRQRWKLQJPRUHWKDQVLPSOHLQIRUPLQJRIWKHPHPEHUVRIWKHZRUNHUV¶FRXQFLO
about the decisions which were practically already made, and only demanding their support,
while ordinary workers were only post festum informed about the decisions.292 This kind of
practice, which was by the early 1960s fully developed and somewhat euphemistically
described in several arWLFOHV DV ³IRUPDO GHPRFUDF\´ UHQGHUHG ZRUNHUV¶ FRXQFLOV FRPSOHWHO\
LQHIIHFWLYH FRQVLGHULQJ ZRUNHUV¶ LQ WKH GHFLVLRQ PDNLQJ SURFHVV ZKLOH RQ WKH RWKHU KDQG
resulted in disillusionment of the workers with the self-management system, their lack of
interest DQGKLJKHUUDWHRIDEVHQWHHLVPZKLFKZDVFRPSOHWHO\RSSRVLWHIRUPWKH3DUW\¶VPDLQ
goals. On the other hand, it was not the only reason for the practical failure of the ambitiously
GHVLJQHGV\VWHPRIWKHZRUNHUV¶VHOI-management.
The introduction of the new technology and production practices, in combination with
WKH FRQVWDQW ULVH RU WKH IDFWRU\¶V RXWSXW ZKLOH LQ VKHDU HFRQRPLF WHUPV ZDV D JUHDW VXFFHVV
story, in terms of its impact on the decision making in the factory the results seems to be quite
opposite. The production of automobiles rose sharply in the period between 1954 and 1962 ±
from only 55 to 13,719 and with the new factory designed for production of 32,000 of vehicles
per year.293 Even before the opening of the modern and technologically sophisticated factory in
July 1962, it became obvious that, on the one hand, the serial production of automobiles
necessitated the division of the production facilities into more independent production units, if
for nothing more than maintaining the achieved level of production, which indeed was
FRPSOHWHO\ FRQVLVWHQW ZLWK WKH RIILFLDO SROLF\ RI ³GHFHQWUDOL]DWLRQ´ 7KLV LV FRQILUPHG E\ WKH
Immediate Producers], Crvena Zastava , no. 41, January 1962, 3.
292
Ibid.
293
Jankoviü7HUP³SURGXFWLRQ´LVQRWWKHPRVWDFFXUDWHVLQFHWKHIDFWRU\VWDUWHGZLWKWKHDVVHPEO\ of the
knocked-down kits delivered by Fiat, but with gradual and constant rise of the number of locally produced
components.
96
observation that the organization of production in the Crvena Zastava factory was unique in the
country in terms of the complexity of its managerial mechanisms:
³7KLV VSHFLILFLW\ FRPHV IURP WKH IDFW WKDW WKH >&UYHQD =DVWDYD@ ,QVWLWXWH LV GLYLGHG LQ
great number of organizational units with highly developed and decentralized multileveled
system of self-management, in which the division on production units was not performed
GLUHFWO\EXWILUVWRQIDFWRULHVDQGEXVLQHVVXQLWVDQGRQO\ZLWKLQWKHPRQSURGXFWLRQXQLWV´294
To simplify this complicated language, according to official reports the introduction of
the modern technology seems to be responsible for faster and more elaborate decentralization
of the production and consequently the decision making process in the Crvena Zastava factory,
which was further supported by the official Party policies.
At the same time, the introduction of the modern technology was also consistent with
WKH 3DUW\¶V DOUHDG\ PHQWLRQHG SUDFWLFH DQG QRW WKH RIILFLDO SROLF\ RI PDLQWDLQLQJ WKH IXOO
control of the decision making mechanisms. Even though this was officially criticized, the fact
UHPDLQVWKDW³EHFDXVHRIWKHGHDGOLQHVWKHUHTXLUHPHQWVIRUIDVWGHFLVLRQPDNLQJ´LWZDVRIWHQ
³LPSRVVLEOHWRFRQVXOWZRUNHUV´DQGWKLVZRXOGDOVRXQDYRLGDEO\SURGXFH³ZDVWHRIWLPH´ 295
On the other hand, the collision between the new technology and the Party policies came from
WKH IDFW WKDW WKH 3DUW\¶V LPSRUWDQW SROLWLFDO JRDO ZDV WR LQFRUSRUDWH PRUH ZRUNHUV LQWR WKH
decision making system. The expressed doubts about the effectiveness of the system, where
several dozens of skilled and semi-skilled workers had to make quick decisions concerning
several more or less independent production sectors, seems to be quite legitimate.
294
Nenad 3HMþLü ³Samoupravni procesi u Zavodima µCrvena Zastava¶´ [Self-Management Processes in the
³&UYHQD =DVWDYD´ ,QVWLWXWH@ Ln 6DPRXSUDYOMDþND iskustva. ýDVRSLV za teoriju i praksu sa moupravljanja [SelfManagement Experiences. The Journal of the Self-0DQDJHPHQW¶V7KHRU\DQG3UDFWLFH@QR-2 (April 1969), 46.
295
³Dalji razvoj RGOXþLYDQMD neposrednih SURL]YRÿDþa´ >)XUWKHU 'HYHORpment of the Decision Making of the
Immediate Producers], Crvena Zastava , no. 41, January 1962, 3.
97
Finally, this was also the point where the self-management system and the Party
collided with the interests of the middle and high managerial structures within the factory, and
especially with the technicians on the shop-floor level. Even in cases where these people were
the members of the LCY, which was the case more often than not, they were expected and
indeed more inclined to produce the results, focusing both on the plan of the production and its
quality, rather than to perform their political role. This was even truer for the highest
PDQDJHULDO VWUXFWXUHV VLQFH WKH\ KDG WR IXOILOO WKH IDFWRU\¶V REOLJDWLRQV WRZDUGV WKH )LDW DV D
foreign partner, but as well towards the domestic investment banks, and finally the Yugoslav
constantly expanding market. Even though the official report delivers superficial remark that
³>L@QWKHV\VWHPRIVRFLDOVHOI-management it is impossible for any of the expert managers to be
MXVWµWHFKQLFLDQ¶´DQGWKDWWKHLUUHOXFWDQFHWRSHUIRUPWKHLUSROLWLFDOWDVNVFUHDWHG³RFFDVLRQDO
SROLWLFDO SUREOHPV LQ WKH ZRUNHUV¶ FRPPXQLW\´ LW VHHPV WKDW WKLV ZDV MXVW WKH WLS RI WKH
iceberg.296
For obvious political and propaganda gains the self-management system was from its
introduction constantly democratized through co-optation of more and more workers in the
formal management of the factory. At the same time, the LCY was narrowing the limits of the
ZRUNHUV¶ DFWXDO MXULVGLFWLRQ LQ WKH GHFision making to less technical topics, such as salaries,
UHZDUGV KRXVLQJ PHGLFDO FDUH YDFDWLRQV RU WKH PDQDJHPHQW RI WKH ZRUNHUV¶ FDIHWHULD 7KH
DQDO\VLVRIWKHDUWLFOHVSXEOLVKHGLQ WKHIDFWRU\¶VQHZVSDSHUVLQ WKHSHULRG-1962 clearly
confirms this observation.
The implementation of the new technology, production practices and standards,
FRPELQHG ZLWK WKH FRQVWDQW ULVH LQ IDFWRU\¶V RXWSXW LQ WKH FRPSOH[ SURFHVV RI DXWRPRELOH
296
³Dalji razvoj RGOXþLYDQMD neposrednih SURL]YRÿDþa´ >)XUWKHU 'HYHORSPHQW RI WKH 'HFLVLRQ 0DNLQJ RI WKH
Immediate Producers], Crvena Zastava , no. 41, January 1962, 3.
98
production in series, necessitated faster decentralization of the decision making system.
However, due to the need for fast decision making, this only further narrowed both the number
RIWRSLFV DQGWKHMXULVGLFWLRQRIWKHZRUNHUV¶FRXQFLOVOHDYLQJWKHVKRS-floor technicians and
higher managers increasingly more focused on the production process itself than the political
JDLQVIURPWKHV\VWHPRIPDVVV\VWHPRIZRUNHUV¶VHOI-management.
All this left the workers in a complete chaos of a constantly growing number of
different councils and bodies of the self-management system, but with their formal managerial
rights being continuously robbed. While this was to certain extent natural development in the
Communist Party controlled system, it also seems evident that the introduction of the modern
technology only accelerated the process, thus leaving the Party stretched to cover both ends: its
QHHG WR ³HQWLFH´ WKH ZRUNHUV¶ SDUWLFLSDWLRQ LQ WKH GHFLVLRQ PDNLQJ SURFHVV DQG WR RSHUDWH
factory as efficiently as possible. Thus, the contradictions visible on the macro level rising from
the process of implementation of the advanced Western technology into the socialist system
(chapter 3.4) were repeated on the micro level of the Crvena Zastava factory. As far as workers
are concerned, they were on all levels increasingly becoming estranged from the system.
2UGLQDU\ZRUNHUVZHUHH[SHFWHGWRSHUIRUPWKHLU³PDQDJHULDO´GXWLHVEXWRQO\WRDOHYHOZKLFK
does not interfere with the production process, while managerial structures were neglecting
their political role as a consequence of increasingly rising production volume and complicated
RUJDQL]DWLRQ RI GDLO\ RSHUDWLRQV ,Q WKLV NLQG RI HQYLURQPHQW WKH ZRUNHUV¶ FRRSHUDWLRQ DQG
support could have only be secured by high salaries, quality housing or extended vacations,
topics which were constantly (re)oSHQHGRQWKHZRUNHUV¶FRXQFLOPHHWLQJV
99
4.2 We Were the Workers: Integrating the Old with the New Workers
Data for the Crvena Zastava factory in Kragujevac for the first couple of years after the
war is scarce since it was part of the military establishment and their work was highly
confidential until 1953 before the switch to passenger automobile production.297 However,
beyond any doubt the wartime destruction of the factory was immense, and the first and
foremost task immediately after the war was its reconstruction. Almost all the buildings were
destroyed or heavily damaged and out of 10,000 different machines less than one hundred was
left in the factory, most of them damaged or completely broken. 298 Workers shared the
IDFWRU\¶VGHVWLQ\± out of 12,000 workers from the pre-war period, during the war at least 3,500
ZHUHH[HFXWHGLQWKH*HUPDQ$UP\¶VUHSULVDOVLQ.UDJXMHYDFDQGRQO\RIZHUHSUHVHQWLQ
the town in 1944 when the German Army left and the process of reconstruction started.299
During the war, indeterminable number of workers from Kragujevac took part in the
Communist liberation struggle and became famous for their production of the makeshift hand
JUHQDGHV ZKLFK DW RQH SRLQW EHVLGH LWV SUDFWLFDO XVH EHFDPH WKH V\PERO RI WKH ³SHRSOH¶V
resistancH´300 The specific relationship between the workers and this factory, mentioned in the
second chapter, can be also observed from the fact that immediately after the war old workers
returned the hand tools and smaller specialist machines they took from the factory right before
the Germans arrived, while some of the tools were found within the factory, buried and hidden
297
7KH QDPH ³&UYHQD =DVWDYD´ ZDV HVWDEOLVKHG LQ DIWHU WKH GHFLVLRQ WR VWDUW WKH SURGXFWLRQ RI SDVVHQJHU
automobiles in the previous weapons and ammunition facilities.
298
=HþHYLü, 13.
299
JRGLQD UDGQLþNRJ VDYHWD -1985; Jankoviü, 20-21. Numbers of workers killed during the war vary in
different literature between 3,500 and 8,500; the same is true for the number of machines found after the liberation
of Kragujevac ranging between 40 and 85.
300
JRGLQD UDGQLþNRJ VDYHWD -1985. Hand greQDGHV ZHUH EXLOG RQ WKH<XJRVODY¶V$UP\ SUH-war model,
only with a stamped star. During the war these hand grenades were nick-QDPHG ³.UDJXMHYND´ ZKLFK FDQ EH
WUDQVODWHGDV³WKHJLUOIURP.UDJXMHYDF´
100
by the workers.301 For those workers who survived the war, their loyalty to the factory was only
strengthened, and the strong core of experienced and battle hardened workers who started the
process of reconstruction was thus created.
In the radically changed political and economic situation in Yugoslavia after the war,
loyalty to the factory in combination with equal pre-war loyalty to the Communist party and
war-time engagement were considered as the best qualifications even for highest management
positions, which is most clearly visible in the case of the managing director of the whole
FRPSOH[9RMD5DGLü+HVWDUWHGDVDVLPSOHZRUNHULQWKHHDUly 1930s, and as a member of the
&RPPXQLVWSDUW\KH³SURWHFWHGWKHLQWHUHVWVRIWKHZRUNLQJFODVV´ 302 Already in 1941 when the
ZDU VWDUWHG ³FRPUDGH 9RMD´ ZDV RQH RI WKH RUJDQL]HUV RI WKH VDERWDJH LQ WKH IDFWRU\ DQG
GXULQJWKHZDUKH³EHFDPHDQRIILFHUZDUKHURDQGJHQHUDO´303
Coming from the lowest ranks of the unskilled workers with additional war-time
³H[SHULHQFH´LWLVGLIILFXOWWRMXVWLI\KLVDSSRLQWPHQWWRDSRVLWLRQRIJHQHUDOPDQDJHULQDQ\
other terms except as a sort of a reward for a long time LCY membership and activism. At the
same time, his fast rise through the officer ranks in the Army, however it may be explained,
also suggests that his organizational capabilities were at least adequate for the position he was
appointed to. While this was of no surprise in the given circumstances, this also seems to
suggest that no manager with expert knowledge and education was actually needed at the time.
Without much experience in modern technologies and production, it also seems evident that
³FRPUDGH9RMD´ZDVEDVLFDOO\UXQQLQJDODUJHZRUNVKRSZLWKZRUNHUVZKRPRUHRUOHVVNQHZ
their job, and where maintaining of discipline was probably the most important task to perform.
301
Jankoviü., 21.
=&=5DGQLþNLVDYHW>:RUNHUV&RXQFLO], 38 (1953-LQIXUWKHUUHIHUHQFH=&=56:RUNHUV¶FRXQFLO
GHFLVLRQ IRU DZDUGLQJ GLUHFWRU9RMD 5DGLü ZLWK DQ DXWRPRELOH 0D\ 7KLV GHFLVLRQ ZDV SDUW RI 5DGLü¶V
relief package, which comprised his promotion to the rank of general, new military duty in Belgrade, war hero
medal, and a luxury model of Fiat.
303
=&=56:RUNHUV¶FRXQFLOGHFLVLRQIRUDZDUGLQJGLUHFWRU9RMD5DGLüZLWKDFDU0D\
302
101
,QWKLVMRE³FRPUDGH9RMD´ZDVVXFFHVVIXOHQRXJKVLQFHWKH&UYHQD=DVWDYDIDFWRU\ under his
management was considered as one of the most efficient enterprises in the country.304
However, his retirement in 1955, right after the production of automobiles based on
license agreement with Fiat had started, even though it was done with full honors, points to the
conclusion that with the introduction of the modern technology and the production of the
complex machine such as automobile, new and more educated managing director was needed.
7KHIDFWWKDWKLVVXFFHVVRUZDV3UYRVODY5DNRYLüDPDFKLQHHQJLQHHUZKRJUDGXDWHGLQ
and was proven in many different and responsible tasks during the ten years after the war,
points to the same conclusion.305 ,QWHUHVWLQJO\HQRXJK5DNRYLü¶VJUDQGIDWKHUDQGIDWKHUZHUH
ERWK VNLOOHG JXQVPLWKV ZKR ZRUNHG DQG UHFHLYHG WKHLU HGXFDWLRQ LQ .UDJXMHYDF¶V ZHDSRQV
factory during the interwar period, making him almost ideal candidate for the job.306
Starting the production of automobiles also necessitated great number of expert workers
and especially engineers, and the Kragujevac factory, in spite of its industrial heritage, was
lacking in both. Since this factory was part of the military establishment, skilled workers were
transferred to and from Kragujevac as necessary, usually through verbal orders, and especially
during the period of relocation of the production program to other Yugoslav republics after
1948, when a couple of hundred expert workers were transferred with their specialized
programs (see chapter 33).307 Thus, great number of highly specialized technicians from
Kragujevac was employed in factories all over the country and even in the Ministry of
Industry.308 However, the result of all these changes was that the number of workers in the
Crvena Zastava after 1949 constantly dwindled; the number of workers in 1949 was again
304
3OHãWLQD, 40.
Jankoviü, 165.
306
Ibid.
307
Ibid., 25-26.
308
=HþHYLü, 37, 44.
305
102
reached only in 1956 when the production of automobiles had already started.309 So, who were
the workers who started the automobile industry in Yugoslavia?
$FFRUGLQJWRRQHRIWKHVWHQRJUDSKLFQRWHVIURPWKHZRUNHUV¶FRXQFLOKHOGLQRQH
of the conclusions was that the factory had enough qualified workers, but that only few of those
ZLWKJUHDWHUH[SHULHQFHIURPWKHLQWHUZDUSHULRGVWLOOUHPDLQHG7KRVH³IHZ´LQVKHHUQXPEHUV
were only 15 engineers and 70 technicians; the rest were unskilled or semi-skilled workers.310
Furthermore, it was difficult to find enough engineers in the country who had at least some
kind of experience in machine industry, and these had to be paid well, since all other factories
were basically searching for this type of workforce. This frantic search created a very
complicated situation where in general the extremely small number of engineers was in
SRVLWLRQ WR EODFNPDLO WKH IDFWRULHV %RWK 5DGLü DQG 5DNRYLü HDFK ZKLOH LQ SRVLWLRQ RI
managing director, were visiting factories and universities across the country in their search for
the engineers, and the first three new engineers in the Crvena Zastava factory each demanded a
new automobile as a part of their employment contract, while on the same principles the factory
was giving generous stipends to great number of successful university students.311 The machine
industry was obviously in short supply of engineers and they could bargain even for new
automobiles, but in general it was quite common for engineers to demand at least an apartment
as a precondition for their employment in the given factory.312
However, no matter how desperately the factory needed experienced engineers, old
ZRUNHUVFOHDUO\H[SUHVVHGWKHLU³SHDVDQWYLHZRIWKHLQGXVWU\´DVWKH\ZHUHDFFXVHGRQRQHRI
309
Jankoviü., 26-27.
3DUWRIWKHVWHQRJUDSKLFQRWHVIRUPWKHZRUNHUV¶FRXQFLOKHOGLQWKH³&UYHQD=DVWDYD´IDFWRU\RQ2FWREHU
1954; published in Jankoviü, 46-50.
311
JankoviüɁɟɱɟɜɢʄ-38.
312
,YDQD'REULYRMHYLü³äLYRWXVRFLMDOL]PX-SULORJSURXþDYDQMXåLYRWQRJVWDQGDUGDJUDÿDQDX)15--´
[Life in Socialism-Contribution to the Research of the Standard of Living of the Citizens in FNRY 1945-1955],
Istorija 20. veka , no. 1 (2009), 83.
310
103
WKH ZRUNHUV¶ FRXQFLO PHHWLQJV E\ EHLQJ KRVWLOH WRZDUGV WKH HQJLQHHUV ZKo came to work in
their factory, and this hostility was one of the reasons why engineers were reluctant to come to
Kragujevac, or left soon after they arrived.313 In an environment where the experience and
expertise of the old workers was increasingly becoming redundant and obsolete, where the
factory gave high salaries and stipends to students and recent university graduates with almost
no practical experience, and where the Party was loudly propagating the ideas of social equality
in the new socialist society as well as the self-management system of factories where the
decisions were to be made by the workers themselves, the old workers were openly expressing
their dissatisfaction. Even though this dissatisfaction never evolved into an open revolt, the
reasons of which are numerous314, this created variety problems in production and at the same
time planted the seed of discord between ordinary workers on one side, and engineers and
technicians on the other.
Old workers in the Crvena Zastava factory were also actively resisting the introduction
of young engineers, as the experience of Aleksandar Rogatkin clearly shows. As a young
military machine engineer Rogatkin was not given the proper job in a technical or design
department but instead he was send to test thHQHZULIOHV³DMREZKLFKFRXOGKDYHEHHQGRQHE\
DQ\XQVNLOOHGZRUNHU´LQVXOWHGE\WKLVNLQGRIDWWLWXGHKHZDQWHGWROHDYHWKHIDFWRU\EXWZDV
eventually persuaded to stay.315 Similar problems were seen in communication with older
technicians who did not want to switch to a modern and more effective way of organization of
the technical documentation.316 These problems soon reached the general manager and one of
313
Jankoviü, 47.
Military control of the factory was never completely abolished, since one small part of the Crvena Zastava
Insitute continued to produce small armaments and ammunition for the military after 1954/55. It can also be
argued that their loyalty to the factory prevented them from strikes or sabotages, but instead directed their
dissatisfaction towards the newcomers in their community.
315
=HþHYLü, 45.
316
Ibid., 49.
314
104
the proposed solutions was to make a special department where only young engineers and
technicians would be gathered to work.317 This would have been of course complete disaster for
the production in any factory and was never realized, but it shows just how steep was the
generational and educational gap already in the mid 1950s the when first engineers and
technicians with university degrees started to arrive in Kragujevac.
The introduction of new technology was impossible without a much greater number of
engineers and highly educated technicians, and this was one of the constant topics in the
IDFWRU\¶s newspapers. As was already mentioned, the factory was more than generous with
salaries and stipends for young engineers, and soon they flocked to the Crvena Zastava factory.
However, in the hostile environment they were reluctant to communicate with the workers, and
they were usually employed in executive or administrative positions, far removed from the
workshops and ordinary workers, even though the workshop was the place where their
expertise was needed the most. It was not uncommon to find machine engineers working even
in the sales sector.318 1HZO\ DUULYHG HQJLQHHUV ZHUH IHHOLQJ ³D OLWWOH ELW OLNH VWUDQJHUV OHIW
DGULIW´DQGXVXDOO\DYRLGHGHQWHULQJWKHIDFWRU\¶VZRUNVKRSVEHLQJFRPSOHWHO\FOXHOHVVRIWKH
production problems on the shop-floor level.319 This situation eventually evolved into a great
social gap between the old and new ordinary workers and the educated engineers and
technicians, which only grew as the production became more complex. As a final result, large
numbers of engineers were leaving the factory soon after their arrival, finding better paid or
jobs in a friendlier environment, or were completely avoiding even professional communication
with the workers in the workshops.
317
=HþHYLü, 52.
³U potrazi za kadrovima´>6HDUFKLQJIRU&DGUHV@ Crvena Zastava , no. 60, November 1962, 2.
319
³Sigurni ili nesigurni koraci´>8Q)certain First Steps], Crvena Zastava , no. 56, September 1962, 10.
318
105
This was definitely the case of Svetislav Zahar. As a student in his final year of
technical high-school, Zahar received his practical education in the Crvena Zastava factory and
in 1960 he was one of the managers of the construction site of the new Crvena Zastava factory.
He soon received the stipend from the factory and enrolled in the Faculty for the Mechanical
(QJLQHHULQJ DQG ZDV SUHVHQWHG LQ WKH IDFWRU\¶V QHZVSDSHUV DV D IXWXUH H[SHUW320 After the
graduation he was immediately employed in the factory. However, less than two years later, he
resigned and decided to continue his education in the Faculty for the Mechanical Engineering,
where he soon got elected as the assistant, while the stipend invested by the factory for full five
years of his education was waived.321 While the professional development of Zahar was quite
XQLTXHDQGFDQQRWEHWDNHQDVWKHH[DPSOHRIDYHUDJHZRUNHU¶VRUHYHQHQJLQHHU¶VELRJUDSK\LQ
the Crvena Zastava, it is still instructive how after almost two years of work in the factory he
decided to leave, even though he had been preparing since high-school for this job and in spite
of a high salary. At the same time, while the reasons for waiving the stipend he was supposed
to repay to the factory after his resign remain unknown, the fact that the factory lost money and
WLPH LQ FUHDWLQJ WKLV ³FDGUH´ VKRws the consequences of the problem of engineers constantly
OHDYLQJWKHIDFWRU\WKRXJKLWKDVWREHVWUHVVHGWKDWWKHWUXHUHDVRQVIRU=DKDU¶VUHVLJQDWLRQDUH
unstated.
The other problem to consider is the constant introduction of the new workers who by
the rule came from the countryside, and among whom great majority were completely
unqualified.322 Official data at the state level confirm that during the first ten years of the
industrialization in Yugoslavia more than half a million of peasants were permanently
320
³Tri ãNROVNH biografije´>7KUHH6FKRRO%LRJUDSKLHV@ Crvena Zastava , no. 54, July 1962, 10.
ZCZ, Personal Files (PF), Svetislav Zahar.
322
'REULYRMHYLü³äLYRWXVRFLMDOL]PX³
321
106
employed in the industry.323 The data of the workforce in the Crvena Zastava factory also
confirm high rise in number of workers ± in the period 1948-1962 the number of employees
rose from 3,780 to 8,779; at the same time this great rise actually started in 1955/56 and is
clearly related to the start of the automobile production.324 The fluctuation of the workforce
was also immense and according to data for the first ten months of 1949, out of 939,200
workers employed in industry during that period, only 182,000 kept their jobs permanently.325
With their agricultural background, poor or complete lack of education, and constant
fluctuation between the jobs in factories or between factory and the village, it can be argued
that the level of training and education they received was rather limited. At the same time, at
least by the middle 1950s their living standard was extremely low and they could not enjoy any
of the benefits young engineers could, only widening the social gap between old and young
uneducated workers, and the engineers.326
With the sharp rise in production in the Crvena Zastava factory, the problem of constant
input of young and unqualified workers became acute, and by 1961 almost 80% of the semiqualified and unqualified workers were under the age RI ZKR ZHUH LQ HIIHFW WKH ³QHZ´
workers of the post-war generation.327 7KH IDFWRU\¶V PDQDJHPHQW ZDV FRQVWDQWO\ WU\LQJ WR
organize practical courses and seminars in order to provide them with some qualification and to
create a more efficient workforce. While these courses did in fact produce some tangible
results, creating a workforce which was able to deal with the new technology, workers were in
most of the cases using these courses primarily as means of social promotion and were, as their
323
DobULYRMHYLü³¶6YLXIDEULNH¶´
Jankoviü, 183.
325
'REULYRMHYLü³¶6YLXIDEULNH¶´
326
'REULYRMHYLü³äLYRWXVRFLMDOL]PX³-84.
327
³Slabi higijenski uslovi´>3RRU+\JLHQH&RQGLWLRQV@ Crvena Zastava , no. 31, March 1961, 5.
324
107
more educated colleagues, trying to find the employment in administration, away from the
IDFWRU\¶VZRUNVKRSV328
However, this was not always an easy task to perform since young workers who filled
the shop-floor of the Crvena Zastava factory usually came from the public trade schools, which
DVDUXOHDGPLWWHGVWXGHQWVZKRZHUHGHVFULEHGDV³XVHOHVVOHIWRYHUVLQWKHFRODQGHURIYDULRXV
VHOHFWLRQV´329 It was not uncommon that trade school students failed their courses en masse,
with percentage as high as 65% of those who failed one or more courses in one semester.
Factory schools and courses experienced, expectedly, the same problems. Without entrance
exams, the students were extremely different in their starting knowledge and experience, and
the teaching of such diverse group was almost impossible; but when the entrance exams were
introduced, only a small number of students managed to pass them.330
Old workers that still remained in the workforce were by the early 1960s completely
alienated by the system and their workplace. IQ RQH RI WKH DUWLFOHV IURP WKH IDFWRU\¶V
QHZVSDSHUVLWZDVRSHQO\VWUHVVHGWKDWWKH\³ZRUNYHU\OLWWOHDQGRFFXS\WKHVSDFHRIWKH\RXQJ
ZRUNHUV´331 This kind of attitude on the shop-floor level was contagious and at least some of
young workers were soon accustomed to the practices of their older colleagues, combining it
with their peasant mentality and attitude towards the work in general. On several occasions it
ZDV VWUHVVHG LQ WKH IDFWRU\¶V QHZVSDSHUV WKDW ³LW LV QRW XQFRPPRQ WKDW ZRUNHUV ZDLW IRU IXOO
hoXU WR VWDUW WKHLU MRE´ DQG ZKDWHYHU WKH FDXVH PD\ KDYH EHHQ IRU WKLV SRVWSRQHPHQW WKHLU
VXSHUYLVRUV ZHUH ³DYRLGLQJ WKH ILQHV IRU WKH XQGLVFLSOLQHG ZRUNHUV´ EXW ZHUH LQVWHDG
328
³âWD vam se u prHGX]HüX VYLÿD a ãWD ne"´>:KDWGR<RX/LNHDQG'LVOLNHLQWKH&RPSDQ\"@ Crvena Zastava ,
no. 29, January 1961, 7.
329
³Gde je uzrok za slab uspeh XþHQLNa´>:KDWLVWKH&DXVHIRUWKH3RRU5HVXOWVRIWKH6WXGHQWV@ Crvena Zastava ,
no. 9, March 1959, 7.
330
³Nova generacija majstorske ãNROe´>1HZ*HQHUDWLRQRIWKH0HFKDQLFV6FKRRO@ Crvena Zastava , no. 2, August
1958, 3.
331
³âWD vam se u SUHGX]HüX VYLÿD a ãWD ne"´>:KDWGR<RX/LNHDQG'LVOLNHLQWKH&RPSDQ\"@ Crvena Zastava ,
no. 29, January 1961, 7.
108
³FRXQVHOLQJWKHPLQRUGHUWRKHOSWKHPUHFRJQL]HWKHLUPLVWDNH´ 332 Only the multiple offenders
could expect to be eventually fined, and those few who got fired were already tried and
imprisoned several times before they were employed in the factory, and their offenses as
IDFWRU\¶VZRUNHUVZHUHXVXDOO\FDVHVRIVWHDOLQJRUILJKWLQJLQVLGe the factory.333
As a result, the constant and fast flow of workers and possibility of a fast upward social
mobility, which at least some of the ordinary workers managed to achieve, combined with even
faster growth and modernization of production capacities led to a situation in which the factory
was filled with unskilled and semi-skilled labor from the villages around Kragujevac. This was
part of general urbanization and modernization project of the entire society, but at the same
WLPH UHVXOWHG LQ ³SHDVDQWL]DWLRQ´ RI WKH SURGXFWLRQ SUDFWLFHV 5HVXOWV IURP WKH H[WHQVLYH
research on absenteeism in the Crvena Zastava factory conducted in mid 1970s (1974-1979),
seem to prove these theses.
)RUH[DPSOHZRUNHUV¶DEVHQWHHLVPZDVVL[WLPHVKLJKHULQWKHSURGXFWLRQsector than in
administration, and was also higher among the younger workers where only 49% of them were
never late for work, compared to 78% among the older workers.334 One of the reasons for this
DEVHQWHHLVPZDVIRXQGLQZRUNHUV¶GRLQJDJULFXOWXUDODQGRWKer work outside the factory, while
others were attributed to the global social changes and organizational structures. The only
viable explanation given in the report was that the younger workers were estranged from the
factory work since they had a more humanistic education and frustrated ambition due to
impatience for social promotion and economic advancement, therefore being less adapted to
332
³9LãH kontrole´>+LJKHU&RQWURO@ Crvena Zastava , no. 12, June 1959, 7
³Sa disciplinske komisije´>)URPWKH'LVFLSOLQDU\&RPPLWWHH@ Crvena Zastava , no. 61, November 1962, 7.
334
%UDQLVODY ýXNLü $SVHQWL]DP X UDGX L VDPRXSUDYOMDQMX LVWUDåLYDQMH X =DYRGLPD &UYHQD zastava "
[Absenteeism from Work and Self-Management: Research from the Red Flag] (Kragujevac : Svetlost, 1985), 4950.
333
109
IDFWRU\¶VZRUNLQJHQYLURQPHQWWKDQWKHROGHUJHQHUDWLRQV335 However, this research was done
in period when self-management was still dominant way of organizing work, and part of
official discourse, so it would be difficult to expect criticism.
At the same time, the fact that agricultural work among the factory workers was part of
their income, working practices, or simple seasonal ritual, clearly shows just how slowly old
practices were abolished, whatever the true number of them may have been. Even in the 1980s,
songs of the workers, and especially among the older ones, and younger who came from rural
areas, reveal that the main topics are village life or other reference to benefits of rural life,
idealistic view of the coexistence between people and the nature.336
The introduction of the advanced technology without any doubt had sparked the need
for educated workers, and with the constantly rising production, the project of their education
on the technical level seems to be successful. On the other hand, while the workforce in general
did become more educated and capable of performing even complicated tasks in the process of
production of automobiles, this technological progress had dubious impact on the creation of
the workforce in the Crvena Zastava factory. In an idealistically envisioned socialist society of
social equality, right from the start there was a sharp division between the classes, based not
only on their educational level, but also their income and social status. Inside the factory, this
created great social rift and gap between the managerial structures and the workers themselves
who became socially alienated. As a sort of microcosm of the Yugoslav society in general, the
story of social structures of the Crvena Zastava factory and the dynamics of their everyday
335
ýXNLü
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Flag InVWLWXWH:RUNHUV@Ʉɪɚɝɭʁɟɜɚɰɋɜɟɬɥɨɫɬ-29. Words and motives such as oak or birch tree, sunset
over the river Morava, apples, sunflowers, the sun, are much more common in these poems than motives from the
factory but there are songs celebrating forgery and other production sectors in the Crvena Zastava factory as well.
336
110
FRPPXQLFDWLRQ VKRZ WKDW WKH ³PDQDJHULDO VWUXFWXUHV´ ZHUH OHIW ZLWK YHU\ IHZ RSWLRQV IRU
maintaining the critical level of social and political support other than an open buyout.
4.3 Learning by Doing
³:LWK WKH H[SHULHQFH JDLQHG WKURXJK HYHU\GD\ ZRUN LQ SURGXFWLRQ RQ RXU PDFKLQHV
which we procured and installed in that workshop, we created our own trained cadres, in their
expertise and numbers. That kind of mass training of people we could not have financed or
organized in other factories. We were able to train foremen and brigadiers for this workshop,
and now they became instructors in everyday produFWLRQ IRU QHZ FDGUHV IRU QHZ IDFWRU\´
0RPLU=HþHYLüWKHILUVWGLUHFWRURIWKHDXWRPRELOHIDFWRU\337
7KHVH PHPRULHV RI 0RPLU =HþHYLü ZKR DV D \RXQJ HQJLQHHU LQ EHFDPH WKH
director of the new Crvena Zastava automobile factory, point to basic problems of introduction
of new, or at least previously unfamiliar technology in any kind of industrial facility: while
obtaining and providing sophisticated machinery, new buildings and complete blueprints for a
technologically advanced production is important precondition for the establishment of any
kind of new production program, workers have to be experienced, educated and trained to be
able to work with these machines. Furthermore, this kind of knowledge does not come with the
machinery; it has to be acquired through the process of learning and this creates another set of
problems. As Arrow argues by making an analogy with the students in the school, even when
WKH\DUHH[SRVHGWRWKHH[DFWO\WKHVDPH³HGXFDWLRQDOH[SHULHQFHV´WKHOHYHORIH[SHULHQFHWKH\
brLQJ WR WKH FODVV LV QHFHVVDULO\ GLIIHUHQW DQG VR LV WKHLU SHUIRUPDQFH RU WKH ³OHDUQLQJ
FXUYH´338 Starting with this hypothesis, it seems that the experience shapes knowledge in a
337
=HþHYLü
.HQQHWK-$UURZ³7KH(FRQRPLF,PSOLFDWLRQVRI/HDUQLQJE\'RLQJ´ The Review of Economic Studies 29,
no. 3 (June 1962), 155.
338
111
twofold manner ± as a precondition to any kind of learning, whatever its level might be, and as
a more dynamic category or a mean through which the knowledge can be acquired.339
The small initial group of the Crvena Zastava factory workers quickly reconstructed the
buildings damaged during the war, with automobile repair-shop being repaired first. This
workshop was the easiest to repair since it was the only one which was in continuous use
during the war, but other workshops were soon restored as well.340 By the end of 1945 the
reconstructed workshops repaired around 300 different vehicles, 100,000 rifles and machine
guns and 30 cannons for the Yugoslav and the Red Army needs. 341 However, while these
numbers are impressive and maybe even overblown, the fact remains that what was once a
factory basically continued its work after the war as a large repair shop, possibly producing
only smaller parts for the more complex machines, but even that was done in a workshop
manner and not in serial production. The previously mentioned story of the first managing
GLUHFWRU RI WKH IDFWRU\ 9RMD 5DGLü Dlso points to the conclusion that until the start of the
automobile production, the factory in Kragujevac operated basically as a large workshop. The
introduction of new production program based on the technology of the Italian automobile
manufacturer Fiat in 1954/55 actually marked the start of the process of creating an up-to-date
industrial facility and the first task was to educate and prepare the workers as well as
technicians for this kind of production.
At the moment when the contract with Fiat was signed, the factory could rely on 15
HQJLQHHUVDQGWHFKQLFLDQVEXWWKHSUREOHPZDVWKDW³QRQHRIWKHPKDGHYHUHYHQVHHQZKDW
339
Arrow, 155-156. The author puts forth the notion that the experience gained through continuous production
practice can be the source of knowledge; learning through experience.
340
Od topa do automobila, 1853-1973, 48-49.
341
-DQNRYLü, 21-22.
112
DQ DXWRPRELOH IDFWRU\ ORRNHG OLNH OHW DORQH ZKLFK PDFKLQHV LW KDG´342 With some practical
trial-and-error type of experience gained in the previous period and through assembly of 162
³-HHS´ YHKLFOHV LQ VHH FKDSWHU DQG ZLWK WKH UHPDLQLQJ ZRUNIRUFH EHLQJ HYHQ OHVV
prepared for this kind of production, the prospects for successful organization of the automobile
production ZHUH DW OHDVW GLVKHDUWHQLQJ 1RQHWKHOHVV WKH ZRUNHUV¶ FRXQFLO GHFLVLRQ DERXW WKH
switch to the automobile production was reached, the new managing director with respectable
experience acquired in different factories in Yugoslavia during the previous decade had arrived
by 1955, and in the organization which was managed for more than one hundred years by the
military establishment, failure was not an option.
However difficult the task that laid ahead of these Yugoslav pioneers in automobile
production might have been, there seemed to be some calm and composed heads manning this
project.343 The first task was to educate and prepare the engineers and technicians who had
enough previous experience and knowledge to understand new technology and who would later
on be able to proscribe adequate procedures, norms and to create necessary technical
GRFXPHQWDWLRQ 7KLV ³LQGXVWULDO VTXDG´ DV LW ZDV FDOOHG LQ ODWHU \HDUV E\ PDQDJLQJ GLUHFWRU
5DNRYLü FRPSRVHG RI RQO\ HQJLQHHUV DQG WHFKQLFLDQV ZLWK 5DNRYLü DV D OHDGHU ± they
packed in a small bus and started in June of 1956 a study tour across the Europe, first visiting
the Fiat factory in Turin, but also many other automobile and machine factories in France,
Germany, Switzerland, Austria and Czechoslovakia, as well as automobile exhibitions in Turin
and Hannover.344
342
Ibid., 50.
This remark is primarily direFWHGWRZDUGVWKHWKHQQHZPDQDJLQJGLUHFWRU5DNRYLü+HVWDUWHGKLVFDUHHUDIWHU
the war working in the national railroad company; since 1948 he was employed in the planning department of the
Directorate of the Military Industry, in the Ammunition DepartmeQW KH FDPH LQ WKH ³&UYHQD =DVWDYD´ IURP D
SRVLWLRQ RI D WHFKQLFDO GLUHFWRU LQ WKH ³7LWR´ DPPXQLWLRQ IDFWRU\ LQ 9RJRãüD %RVQLD 'HWDLOHG ELRJUDSK\ RI
3UYRVODY5DNRYLüLQ-DQNRYLü-166.
344
³%LOL VPR LQGXVWULMVNL RGUHG´ >:H :HUH ,QGXVWULDO 6TXDG@ Auto industrija , no. 12 (1973), 5. Interview with
343
113
(DFKPHPEHURIWKH³VTXDG´ZDVDVVLJQHGWRIRFXVRQDSDUWLFXODUSURGXFWLRQVHJPHQW
according to his expertise, and later on all these observations were compiled in a single volume
RI³OLWWOHPRUHWKDQRQHKXQGUHGW\SHGSDJHV´ZKLFKEHFDPHWKHILUVWSURIHVVLRQDOHGLWLRQDERXW
the automobile production in the country.345 The study tour was also crucial for the final
decision about the program of future production, since only then was it decided that this
program VKRXOGEHEDVHGRQDVPDOO³SHRSOH¶VFDU´DVZDVWKHFDVHLQPRVW:HVWHUQ(XURSHDQ
countries at the time.346 It seems that this study tour produced good results and the concept was
applied again several months later, only this time it was expanded to include representatives of
the entire Yugoslav motor industry. On October 1956, officially organized by the Association
of Motor and Motor Vehicle Producers, but most likely through previously established contacts
GXULQJWKH&UYHQD=DVWDYDWRXUDQRWKHU³VTXDG´of 15 engineers, one from each of the motor
and automobile factory in Yugoslavia, some of the most famous automobile factories in
Western Europe.347
For the Crvena Zastava factory, several important directions of its internal development
may be reconstructed. First, limits of the workshop manner of automobile assembly appear to
have been quickly reached and the new organization of the work was needed in order to
3UYRVODY5DNRYLü Od topa do automobila, 1853-1973, 61; -DQNRYLü These and other sources give in general
the same story, yet the only difference is the date of this study tour, ranging between summer 1956 and spring
1957. I opted for the earlier year since the production in 1957 showed increase of production by126% compared to
the previous year, while in 1958 it had even dropped compared to 1957 (1955-1,051; 1956-1,621; 1957-3,677;
1958-3,596). I attriEXWHWKLVVKDUSULVHLQSURGXFWLRQWRWKHH[SHULHQFHJDLQHGE\WKH³LQGXVWULDOVTXDG´GXULQJWKHLU
study tour.
345
8(YURSXSR]QDQMH´>,Q(XURSHIRU.QRZOHGJH@ Crvena Zastava , no. 1350 (March 2003), 21. Interview with
3UYRVODY5DNRYLü; Od topa do automobila, 1853-1973, 61
346
AJ, 253, 1. Approval of Federal Executive Council (Secretariat for Industry) for expansion of the license
agreement with Fiat, October 5, 1956; -DQNRYLü -DPHV 0 /DX[ The European Automobile Industry (New
York: Twayne Publishers, 1992), 175-203. Due to lack of materials, slow recovery of the market and low
SXUFKDVLQJ SRZHU RI WKH JHQHUDO SRSXODWLRQ VPDOO DQG VLPSOH ³SHRSOH¶V FDUV´ EHFDPH WKH IRFXV RI WKH
reconstruction of the post-ZDU (XURSHDQ DXWRPRELOH LQGXVWU\ ZLWK ³9RONVZDJHQ´ LQ *HUPDQ\ OHDGLQJ WKH ZD\
ZLWKIDPRXV³EHHWOH´³&LWURHQ´SURGXFHG³&9´DQGFiat GHYHORSHGPRGHO³´LQZKLFKZDVUHFRJQL]HG
in Yugoslavia as ideal for local conditions.
347
AJ, 253, 1 /HWWHU RI $SSURYDO IRU WKH ³&UYHQD =DVWDYD´ HQJLQHHU /MXERPLU 7RãHYVNL 2FWREHU <XJRVODY HQJLQHHUV YLVLWHG )LDW LQ ,WDO\ ³5HQDXOW´ DQG ³&KDXVVRQ´ LQ )UDQFH ³0HUFHGHV´ DQG ³'HXW]´ LQ
*HUPDQ\DQG³6DXUHU´LQ$XVWULD
114
increase the production. Second, the study tour is chronologically consistent with the first
investment project which was approved in 1956 for a capacity of 3,000 vehicles per year (see
chapter 3.3). This also points to the conclusion that for the expanded capacities, a new
organization of work on the shop-floor was needed. Finally, the production of different parts
and components is never mentioned in this period, and it seems that what is in various sources
GHHPHGDV ³SURGXFWLRQ´ ZDVQRWKLQJPRUHWKDQDVVHPEO\RILPSRUWHGNQRFNHG-down vehicle
kits. This is confirmed by the sources where it is stated that the conquering of production in the
Crvena Zastava factory started only in 1960; by the time new factory opened in 1962, only 38%
RIWKHFRPSRQHQWVIRUSRSXODUSHRSOH¶VFDU³)LüD´ZHUHSURGXFHGLQ<XJRVODYLD348
Concerning the process of learning these conclusions are suggestive. It seems that most
RI WKH VXFFHVVHV LQ WKH FRQWLQXRXVO\ ULVLQJ IDFWRU\¶V RXWSXW DW OHDVW LQ WKH SHULRG -1960,
was achieved without too much investments (see chapter 3.3) in complex machinery or in
conquering of the production as such, but predominantly through continuous process of
³OHDUQLQJ WKURXJK H[SHULHQFH´ RI DXWRPRELOH DVVHPEO\ ± workers were gradually becoming
accustomed to the basic automobile factory operations and becoming more efficient, all of
which steadily prepared them for the start of the production in the modern factory, which was
opened in July 1962. This does not mean that there was no communication with Fiat or other
companies which produced specialized tools and machines but rather that these contacts were
more focused on learning how to organize work in automobile factory than on the production
of parts and components. At the same time, the focus in the period before 1960 was on the
348
³,VWLQDRµ=DVWDYLQRM¶SURL]YRGQML´>7KH7UXWKDERXW=DVWDYD¶V3URGXFWLRQ@ Crvena Zastava , no. 42 (February
1962), 3. The data in this article are particularly interesting and reliable, since they were used in this special issue
RIWKHIDFWRU\¶VQHZVSDSHUVLQUHVSRQVH WRWKHDWWDFNVLQGDLO\SUHVVLQZKLFK³&UYHQD=DVWDYD´ZDVDFFXVHGRI
gaining high profits without much work, basically assembling vehicles completely produced in Italy. The
production of the commercial 1,5 t truck was almost completely conquered by 1962, but it does not change the fact
that the process of conquering of the production of automobiles in the factory started only in 1960, since most of
WKH³FRQTXHUHG´SURGXFWLRQZDVGRQHE\WKHFRRSHUDWRUV
115
raising of general technical education among the workers, and some information about the
courses the workers attended seem to confirm this.
'XULQJ³VHYHUDOKXQGUHGV´RIZRUNHUVDWWHQGHGYDULRXVFRXUVHVLQWKHIDFWRU\DQG
abroad, but these courses and seminars were focused on more general topics such as technical
drawing, material tolerance, technology of metals and even secretarial jobs. 349 In the early 1959
FRXUVHV IRU ZHOGHUV KDYH EHHQ RUJDQL]HG IRU WKH ILUVW WLPH LQ WKH IDFWRU\ VLQFH ³LW ZDV
LPSRVVLEOH WR SURYLGH WKLV W\SH RI FDGUHV IURP DQ\ RWKHU VRXUFHV´ DQG VLQFH WKe existing
ZRUNHUV ³QHLWKHU LQ TXDOLW\ RU QXPEHUV >FRXOG@ PHHW WKH SURGXFWLRQ QHHGV´ 350 Also, at the
beginning of 1959 the official estimate was that the capacity of the existing machinery was
XVHG EHWZHHQ DQG DQG HYHQ LQ WKH IDFWRU\¶V QHZVSDSHUV LW was recognized that
UHDFKLQJ WKH ³KLJKHU SURGXFWLYLW\´ ZDV WKH PDLQ JRDO351 :KLOH WKLV FDOO IRU ³KLJKHU
SURGXFWLYLW\´FDQEHH[SODLQHGDVQRWKLQJPRUHWKDQJHQHUDOGHPDQGFRQVWDQWO\SUHVHQWLQDQ\
kind of planned economy system, it is nonetheless in agreement with previously expressed
statement that it was more urgent task to educate workers, rather than to introduce new
machinery.
This notion seems to be consistent with the data from the archival material where before
1960 there are no records of either Italian experts from Fiat coming to Crvena Zastava or
Yugoslav workers and technicians visiting the Italian manufacturer, or any other for that
matter, except for those previously mentioned, organized in 1956. Some of the communication
was necessarily maintained, which is randomly confirmed in various sources, but the main
archival materials are silent on this topic. Another side of the proverbial coin was that some of
the workers who went to Italy and other Western European countries were not that efficient or
349
³6WUXþQRX]GL]DQMH´>([SHUW(GXFDWLRQ@ Crvena Zastava , no. 6 (December 1958), 2.
³1RYLNDGURYL´>1HZ&DGUHV@ Crvena Zastava , no. 8 (February 1959), 4.
351
³1DãLNDSDFLWHWL´>2XU&DSDFLWLHV@ Crvena Zastava , no. 7 (January 1959), 3.
350
116
too keen to learn. First of all, the problem was that most of the people who went to Italy were
various high ranking managers who, even if they were conducting important negotiations with
the Italian partner about the plans for the future development, were not in a position to learn
themselves or teach ordinary workers how to produce an automobile. However, it seems that
quotidian in foreign currency also draw many others who used their political connections to be
selected for specialization in Italy, usually bringing back to Yugoslavia only new automobile or
a scooter and several full coffers of various consumer goods. 352 These most likely were not
LVRODWHGFDVHVVLQFHWKH\ZHUHDWWDFNHGLQWKHIDFWRU\¶VQHZVSDSHUVEXWPRVWLPSRUWDQWO\WKLV
also reveals that already by the end of 1958, this was more or less an established practice. In the
worst case scenario, some of the people who were sent to Italy did not even speak any foreign
language, making it highly unlikely for them to learn anything but the most basic operations.353
However, between April and October 1960, 11 engineers, 9 technicians and 6 highly
qualified workers of the Crvena Zastava factory went for a specialization course in Fiat. The
important thing to notice is that their expertise basically covered most of the phases of the
automobile production ± construction of the new factory building with complete factory
installations, specialized tools design and manufacture, right down to the introduction of
V\QWKHWLFG\HVLQWKHIDFWRU\¶VSDLQWVKRS354 Beside this group, three administrative executives
received their specialization in different factories in Italy, West Germany and France, in
working with the latest generation of IBM computers.355 While these numbers on the first
glance seem to be small, official statistics for the period 1952-1960 and for the entire
352
³,PD LK L WDNYLK´ >6RPH RI 7KHP DUH /LNH 7KDW@ Crvena Zastava , no. 6 (December 1958), 6. This article
actually describes people starving themselves, just to save enough foreign currency to buy what they obviously
could not do without.
353
³,PDLKLWDNYLK´
354
AJ, 253, 15. Series of documents, mostly requests and authorizations for specialization. All of these were took
place in the period April-October 1960, and depending on the task, the workers remained abroad between seven
days and two months.
355
AJ, 253, 15. Authorization for specialization in work with IBM computers, April 12, 1960.
117
automobile and motor industry in Yugoslavia, which in 1960 consisted of 26 different factories,
FRQILUPWKDWRQO\WHFKQLFLDQVH[SHUWZRUNHUVDQGDGGLWLRQDO³SHUVRQVREOLJDWHGE\WKH
OLFHQVHDJUHHPHQWV´HYHUZHQWWRIRUHLJQFRPSDQLHVIRUVSHFLDOL]DWLRQ356
The number of workers in specialization courses in Italy was on a continuous rise since
DQGE\WKHEHJLQQLQJRI³FRPUDGHV´HQJLQHHUVWHFKQLFLDQVDQGKLJKO\TXDOLILHG
workers were selected for specialization courses in Italy, out of which 49 were enrolled in the
four months long audiotape Italian and English language courses as preparation for their
course.357 The memories of one of these workers involved in the process of conquering of the
automobile production are crucial for better understanding how this process evolved on the
shop-floor level:
³,ZRUNHGLQµ=DVWDYD¶V¶IRXQGU\>«@ZKHUH,XVHGWRPDQXIDFWXUHFRPSRQHQWVIRUWKH
weapons, tools and machines. With certain experience and by recommendation, I was
transferred to the group for mastering the automobile production. This was a new job for all of
us model makers, locksmiths and whitesmiths and our task was to transform the blueprints into
the model of future automobile and to use this as a template in designing forming press tools.
Alongside with mastering [of the automobile production] we learned how to do this, with great
KHOSIURPµ)LDW¶H[SHUWV:HGLGQRWKDYHDGHTXDWHFRQGLWLRQVLQRXUIDFWRU\VRZHVSHQWDORW
RIWLPHLQZRUNVKRSVDQGODERUDWRULHVRIRXUEXVLQHVVSDUWQHULQ,WDO\ZKHUHZHZHUHµVWHDOLQJ¶
WKHNQRZOHGJH´358
=HþHYLüLQKLVPHPRLUVFRQILUPVWKLVVWRU\VLQFHKHZDVUHVSRQVLEOHIRUWKHVHOHFWLRQRI
the workers who had to start the process of mastering the automobile production. According to
356
$- ³6SHFLDOL]DWLRQ RI &DGUHV´ RIILFLDO study of the Association of Motor and Motor Vehicle
Producers, October 25, 1960, 1. The number of 26 different factories does not mean that all of them were
producing vehicles; in fact, most of them were highly specialized producers of components, such as speedometers,
or shock absorbers, which is why thet were formally considered a part of the Yugoslav motor and automobile
industry.
357
=&= ³&UYHQD =DVWDYD´,QVWLWXWH¶V6WHHULQJ&RPPLWWHHYROXPH /LVWRI ZRUNHUVGHVLJQDWHG IRUIRUHLJQ
language courses, January 25, 1962.
358
³8þLOLLVWYDUDOL´>:H:HUH/HDUQLQJDQG&UHDWLQJ@ Crvena Zastava , no. 1352 (August 2003), 9. This story is
not dated in the interview, but since these memories were presented in chronological order, with next story
referring to the events of 1963 (not relevant for this chapter), the story presented here must have happened before
1963.
118
his words, he had a free hand in this process and he chose only highly educated technicians
with at least ten years of experience.359 Combining this story with the existing archival
material, a general model of the learning process in the Crvena Zastava factory can be
constructed. The most pressing issue when the assembling of automobiles started in 1954/55
was the inadequate level of technical knowledge of the workforce. Existing technicians and
expert workers were educated for and had experience in the armament production making their
knowledge and expertise somewhat inadequate, yet important as a starting point for the process
of learning how to assemble and later on, produce an automobile. This small group created the
core of expert workers in the future automobile factory.
Younger workers, who were in any case presenting the future majority of the workforce
in the Crvena Zastava factory, first had to be technically educated enough to be able to
specialize in different procedures and operations unique in automobile production. This was
achieved through in-factory courses and through the experience gained during their work on the
automobile assembly. While these parallel processes were not in each case a success story, they
nevertheless produced enough educated workers and technicians who were able to
communicate more or less on an equal level with their Italian counterparts and eventually to
start the production in 1962 in the Crvena Zastava factory as one of the most modern
automobile factories in entire Europe at that time. Therefore, in the time span of seven to eight
years, workers in the Crvena Zastava automobile factory evolved from a handful of expert
gunsmiths followed with several thousand ordinary workers with highly diverse background
and experience in working in any kind of factory, to a group of predominantly young, skilled
group of workers and technicians able to efficiently enough operate modern and complex
industrial facility.
359
=HþHYLü
119
Conclusion
From the very beginning of the period of reconstruction and industrialization of the
country after the Second World War the Yugoslav government realized the potential of the
automobile and motor industry as the leading sector of the Yugoslav project of catching up in
³revolutionary leaps´ ZLWK WKH developed European countries. In the absence of relevant
experience in this industrial branch, both in terms of technical equipment and the professional
workforce, the Yugoslav government had to rely on foreign knowledge and experience. As one
of the most loyal follower of the Soviet Union, Yugoslavia first tried to establish its automobile
industry on a Soviet model. The plan was abandoned soon after the Tito-Stalin split of 1948
and in the changing political climate between Yugoslavia and the Western countries, the help
eventually came from Italy. Cooperation between Fiat, the giant of the Italian and European
automobile industry and Yugoslav Crvena Zastava, since its humble beginnings in 1954/55
eventually grew to a fully blown technical and economic cooperation between the two
FRPSDQLHV %DVHG RQ WKH )LDW¶V WHFKQRORJ\ DQG LWV KHDY\ LQYHVWPHQWV WKH &UYHQD =DVWDYD
factory by 1962 managed to evolve from technically outdated weapons and armament producer
into one of the most technically advanced automobile factory in Europe. Its network of
suppliers was stretched across Yugoslavia, thus linking together a number of other industrial
sectors, thus supporting and stimulating their development and consequently the development
of the entire Yugoslav industry.
However, this success story was not that straightforward. The main backdrop on which
the process of the technology transfer from Italy to Yugoslavia was staged was the Cold War
FRQIURQWDWLRQ $V DQ ³LURQ ILVW RI FRPPXQLVP´ <XJRslavia was designed to be the most
120
DFFXUDWHFRS\RIWKH6RYLHW8QLRQDQGWKH³GHVLJQLQJ´DQG³FRS\LQJ´ZDVEHLQJLPSOHPHQWHG
in every aspect, with great deal of assistance from the Soviet advisors. However, intensive as it
may have been, this process ended abruptly in 1948.
As an outcast from the Soviet bloc, Yugoslavia was not instantly recognized by the
American administration or the West European countries as a potential partner, nor were these
³ODSVHG <XJRVODY %ROVKHYLNV´ ZLOOLQJ WR VWUD\ IURP WKH /HQLnist course. On the other hand,
proving the correctness of the Yugoslav independent way to communism and the erroneous of
all of the other socialist countries, in reality proved to be much more difficult and opening
towards the Western aid soon became the only solution for maintaining the political and
economic stability of the country.
On the other side of this Cold War divide, the political and propaganda potential of
having a defector-country from the Soviet sphere of influence becoming rich and developed
through an open and friendly cooperation with the West was recognized soon enough. Direct
Western aid was quickly provided, but the long term solution had to be found, and one of the
concepts was the development of the Yugoslav economy in order to become self-sustainable
and competitive on the open market. Important part of this project was the transfer of advanced
technology from the Western countries to Yugoslavia.
In the process of the technology transfer between Yugoslavia and the Western
countries, the main agent was Italy. As one of the countries which received greatest amount of
investments among the West European countries in her post-war economic development, Italy
became a model for the rest of the Third World countries of the successful development in
cooperation with the American administration. Yet, Italy also played a more active role since
already in the 1950s it started to invest heavily in the industrial development of the Latin
121
American, African and the developing European countries. In most of the cases this projects
were backed up by international financial institutions, which more often than not acted as a
cover screen of the American diplomacy. As one of the leading industrial giants, Italian
automobile manufacturer Fiat was involved in great number of these projects.
Thus, stretched between the two superpowers in their tug of war, Yugoslavia proved to
be an important testing ground for their policies towards the countries in their respective sphere
of influence but more importantly towards their potential allies. In the case of the Soviet Union,
some of the main features of the process of the Sovietization of the East European countries,
which accelerated only after 1949, were already tested and proved in Yugoslavia during the
short but condensed period of mutual cooperation. In case of the USA, the experiences gained
from the cooperation with Yugoslavia through Italy as the main agent were invaluable in the
creation of the American policies directed towards the Latin American and other Third World
countries.
On the level of the internal political and economic development of Yugoslavia, the
process of technology transfer was not less complex, and in that sense, the country had
H[SHULHQFHG GRXEOH ³VKRFN-WKHUDS\´ ,PSOHPHQWDWLRQ RI WKH 6oviet technology and model of
industrial organization started with the deconstruction of the previously established capitalist
model of organization in the existing industrial facilities, and with parallel process of the
creation of the new socialist society based on the vast and uniform working class. At the same
WLPHVLQFH<XJRVODYLDZDVSUHGRPLQDQWO\SHDVDQWFRXQWU\WKH³SODQQHUV´KDGWKHDGYDQWDJHRI
painting on the clean canvas. On the other hand, Western technology had to be adapted to the
Yugoslav, however specific it may have been, still very much socialist planned economy.
Therefore, even though technology transfer in every instance is necessarily unique, the
122
³XQLTXHQHVV´ RI WKH <XJRVODY FDVH SURYHG WR EH H[FHSWLRQDOO\ FRPSOH[ DQG VWDJHG RQ WKH
backdrop of intense contradictions, and not only those inherent in every socialist system, but
also those coming from the introduction of the practices which originated in the capitalist
systems.
Obstacles in this process of adaptation and implementation of foreign technology to this
kind of environment in many instances proved to be almost impossible to solve institutionally.
The need for rapid decision-making in the technologically advanced production was not in
compliance with the highly bureaucratized political and economic system in Yugoslavia. This
was one of the main reasons why the whole system was often bypassed, and the major
decisions were frequently made by handshake between people and groups who were supporting
certain projects or concepts of the industrial development of the country. On the other hand,
this principle has opened the door for political interventionism and right from the beginning the
interregional struggle had started among the different party leaders who were trying to channel
the much needed investments to their own republics, regions and even towns.
The final result was not what either Yugoslav planners or Western diplomats had hoped
for. While superficial result was achieved relatively quickly and the cooperation based on
technology transfer between the West and the East had produced the desired outcome, showing
that it is possible for a socialist type of economy could be successfully married to the Western
technology and produce in joint effort modern Western type of automobile, the underlying
social and economic results were less impressive. Sparked by the political necessity of the one
side, and the diplomatic strategy of the other, the economic rationale only came at the second
place, and the results seem to be equally ordered. Finally, in the process of creation of the
Yugoslav society, evidence from the Crvena Zastava suggest that the introduction of the
123
Western technology, while envisioned by the LCY leaders as one of the tools of legitimization
of their rule, only helped to estrange the workers from the political system the Party had created
and this was true for all of the structures, from ordinary workers to the top managers.
The importance of this thesis goes far beyond just another addition to the history of the
economic development of socialist Yugoslavia. Due to its specific political and economic
development in the first decade after the Second World War, ranging from being the most loyal
Soviet ally, to the independent socialist country whose prosperity was based on extended
economic and political relationship with the West, the history of development of the Yugoslav
automobile industry in its formative phase offers important insights on various topics. It is a
part of the history of the European socialism in the post-war period, and as an obvious testing
ground for many of the Soviet policies which were later on implemented in other East
European countries, it offers important information which could be revealing in the tackling
with the question if and how were the Soviet policies and practices adapted to the local
conditions in the rest of the countries under its political sphere as a consequence of the failed
attempts to keep Yugoslavia in the Eastern bloc. This topic also enlightens the process of the
European post-war industrialization in which automobile industry played very important role.
The Yugoslav case can be used as a case study of perception of this development in the
socialist countries but it also shows how difficult and problematic was the politically very
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the testing ground for both Soviet Union and the USA. The results of tKHVH VSHFLILF ³FDVH
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superpowers towards the Third World countries. Finally, in the context of the Cold War,
124
communication between the East and the West, as shown in the case of the development of the
Yugoslav automobile industry, was more active and diverse than the heated conflict between
the two entrenched blocs would suggest. Furthermore, the results of my analysis clearly show
that the automobile industry played the important role in this process of communication, thus
showing that the so called Iron Curtain was not that impenetrable.
125
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